One has to admit that these tax expenditures do distort economic decisions

Reader comment on: Martin Feldstein on Tax Expenditures

Submitted by Lyle (United States), Oct 18, 2010 16:07

For example the mortgage interest deduction tends to favor home ownership over renting (following Jefferson) and the fact that medical premiums in employer plans are untaxed, makes them cost less. The question is should the basis be a tax with just the standard deductions and exemption and we show expenditures for all deductions. Just like the muni bond tax exemption is really a disguised subsidy to state and local governments by the fed. Abolish it and their interest rates rise to the level of everyone else.

This is of course the appeal of the simple taxers but my more simple tax is a bit better. I would abolish the corporate tax, since it is too easily evaded. Individuals would pay tax on all money other than reimbursed expenses from corporations. All business would be treated as if incorporated. Then you would take the gross, deduct the standard exemptions and the standard deduction and that's what you pay tax on.

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