Tax Reform

[Benton]

(09-17-2017, 08:48 PM)JustWinBaby Wrote: 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.

Fair enough. On the other hand, the mantra by conservatives for years has been that we don't need a social safety net because people are inherently good and donate. Charitable contributions should — if that's correct — stay the same. If not, there should be an influx of taxable income to keep those safety nets in place.

As far as investment value, meh. A large portion of the country took a hit on investments. More are to come as states continue to grapple with infrastructure and retirement problems they can't afford. We can have a few years of people getting screwed some more, or we can keep trying to patch up the way it was. As one of those who would get screwed a little more, I say go for it if it means fixing it for the future.