09-17-2017, 08:48 PM
(09-17-2017, 08:06 PM)Benton Wrote: Second, eliminate almost all deductions.no child credits, no itemized deductions, etc. leave earned income credit there for the absolute poorest. There would be an exception, also, for businesses. They can deduct up to 80% of infrastructure or other improvements or labor training, provided they do not reduce payroll within a calendar year.
The problem with a lot of that is it's structural, meaning deeply imbedded in people's finances and the financial system in general.
Eliminate the mortgage interest deduction and you raise cost of living for millions of Americans while simultaneously whacking the value of their home. Other deductions (401k, 529, etc) are designed to encourage savings - eliminate the 401k deduction and 401k's probably go away (along with the company match). Eliminate the charitable contribution and I think it's a safe bet non-profits will see 30% of their donations dry up.
It would be great if you could just eliminate the personal income tax because taxes trickle down and every non-public employee ultimately gets their money from a business (whether salaries, pensions, dividends or other investment returns). But it's a global economy, and if your business taxes get too high all kinds of incentive for LEGAL tax arbitrage come into play.
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