Senators Look To Revamp Tax Code Blank Slate Style

Not to get too far ahead, they tried this in 1986 with the Tax Reform Act, and that turned into the behemoth we have today (read Showdown at Gucci Gulch for the details)

(Washington Post) The Senate’s chief tax writers plan to scrap the entire code and start from scratch in their push for tax reform, and on Thursday they gave lawmakers a month to make a case for preserving some of the $1.3 trillion in breaks on the books.

In a letter sent to all 98 of their colleagues, Senate Finance Committee Chairman Max Baucus (D-Mont.) and his Republican counterpart, Sen. Orrin G. Hatch (Utah), said they would take a “blank slate” approach to the tax code that assumes the elimination of thousands of popular perks, including such sacrosanct policies as the deduction for mortgage interest, the child credit, and the lower rate for dividends and capital gains.

They had a nice flat rate set up in 1986, and then someone said “what about the interest deduction on people’s first mortgage”. Snowballed after that.

However, the letter says, “the tax code is also littered with preferences for special interests. We plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives.”

That brings several problems to mind. First, taxation should not be based on the whims of the elected class who come and go but leave their garbage behind. If the policy is not described in the Constitution specifically, it doesn’t belong.

Second, the only thing that makes the code “fairer” is everyone paying the same percent. Of course, what they mean is sticking it to “the rich”, ie, successful people.

Third, if they truly want it to be fair, it should not pick winners and losers in terms of “growing the economy”, since Congress and the President look at this mostly from political terms.

Save $10 on purchases of $49.99 & up on our Fruit Bouquets at Promo Code: FRUIT49
If you liked my post, feel free to subscribe to my rss feeds.

Both comments and trackbacks are currently closed

4 Responses to “Senators Look To Revamp Tax Code Blank Slate Style”

  1. Conservative Beaner says:

    Screw all the deductions. Just give us a flat rate so we can keep more of our money in the first place. Of course those politicians cant all that because without all those tax dollars the government can’t buy votes and what fun would that be.

  2. gitarcarver says:

    Conservative Beaner,

    While I agree with you in principle, the problem with a flat tax is that it starts from a backwards proposition.

    It will start with “how much money does the government want?” rather than “this is what the government is getting.”

    I cant see a politician ever sitting down and arguing that x amount of dollars is what the government needs without constituents rising up and saying “we don’t need that.”

    The main flaw with the flat tax is that it gives taxpayers too much authority and that can’t happen.

  3. Back when Reagan attempted to do this, they figured out a flat rate of around 7%, based on the needs of government spending. Of course, the budget wasn’t quite as out of control at the time, but they did put in provisions that would restrict Los Federales from screwing the rate on a constant basis in order to get more revenue.

    Also, it took tax policy out of the hands of politicians, and tax policy is the most important power any politician wants.

  4. GAI says:

    “Second, the only thing that makes the code “fairer” is everyone paying the same percent. Of course, what they mean is sticking it to “the rich”, ie, successful people.”

    This is a common misconception promoted by the Elite’s Propaganda Machine Mass Media.

    ‘The Rich” protected their wealth by hiding it in tax exempt foundations, bonds and in corporate stock which is taxed from 0% to 15% On top of that tariffs/excise taxes (taxes on imported goods) the old main stay of government finance have declined over time while taxes on WAGES and PAYROLL (SS, medicaid/medicare) has increased to take their place. (Corporate tax has also declined) GRAPH

    Note I said WAGES and PAYROLL TAXES. The rich are NOT WAGE EARNERS and therefore they are not taxed the same way wage earners are. Even the 1/2 who ‘do not pay taxes’ but earn a wage pay PAYROLL TAX. The most productive wage earners (upper middle class) get slapped with a top marginal federal income tax of 39.6%

    In 2010 taxes collected by federal, state and municipal governments amounted to 24.8% of GDP…. The United States also has one of the most progressive tax systems in the industrialized world….

    Anyone who thinks the elite will allow their loopholes to disappear is nuts.

Pirate's Cove