Just saw an article from NYT’s Stephan Ohlemacher about Ways and Means Chairman Dave Camp’s tax overhaul plan and to my eye it has a lot to recommend itself. As Ohlemacher says;
“In theory, the unhappiness at both ends of the political spectrum could mean that Camp has hit all the right notes..”
-I always figure that if you have both sides pissed-off you’re getting somewhere.
Being a Republican plan, of course, it starts with tax cuts. Seven tax brackets become two, with a 10% levy on incomes starting at twenty-some thousand, somewhere becoming 25%, and then add a surcharge on incomes over $425,000 (or $450,000 for married households.) The corporate tax rate would fall from 35% to 25%.
So where does the money then come from? Sacred cows.
“Taxes paid to state and local governments would no longer be deductible.”
-That’s scary to folks in high-tax states, but sounds good to me in Texas, with no state income tax to deduct.
“The earned income credit for low-wage workers would be converted to a more limited deduction on payroll taxes.”
-Well, the EITC, a popular program since the 1970s, is designed to help low-wage workers get by. A payroll tax cut could do the same. There is the question of this being corporate welfare for low-paying employers like WalMart, the biggest welfare queen ever.
“Deductions of mortgage interest in the future would be capped at $500,000 of debt, half the current cap.”
-There is also to be, I believe, no more mortgage interest deduction for second homes. Real estate professionals will be screaming bloody murder about this, and there probably ought to be some relief for poor devils of modest means living in high-dollar housing markets, but this has largely been a deduction for the well-heeled. I don’t want to help pay for somebody else’s McMansion.
“Under the Camp plan, private equity and hedge fund managers would be prevented from classifying much of their income as lower-taxed capital gains for tax purposes, closing what Democrats have criticized as the "carried interest loophole."
-Be still my heart! This is the provision that gave Mitt Romney a tax rate lower than mine.
“Camp even embraced an idea that has taken hold in the most progressive parts of the Democratic Party, a tax on transactions by the biggest banks.”
- I love this idea. The ‘economic sector’ has been growing larger in recent decades through a frenzy of mergers and acquisitions, plus such innovations as “outsourcing,” “offshoring” and “dead peasant policies.” A modest transaction tax could raise boatloads of money while acting as a break on such plagues as automated trading and churning of accounts. I can’t believe I’m seeing it in a GOP proposal.