Tax expenditures versus Rates

Reader comment on: Parsing Obama's Tax Position

Submitted by Lyle (United States), Nov 6, 2010 23:55

The way I would look at it is that the base rates are the issue, that the deductions have been set up to encourage various actions (and discourage others) an example is encouraging home ownership over renting, or the muni bond interest exemption, which is really a disguised subsidy to states and local governments in that they pay less interest because of it. The deal is to take the marginal rates and say, if I abolish deduction X then I can cut the rates by Y etc.

It is like my wild (never happen scheme) abolish the corp income tax, and then you can raise the cap gains and dividend rates to that for other income. It would be interesting to know how much money is spent in efforts to avoid or minimize the corp income tax, since this would then be either returned to the owners or spent on additional facilities.

I heard an interesting proposal abolish the corp income tax and replace it with a carbon tax. Clearly some would win and some would lose with this.

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Other reader comments on this item

Title By Date
They are just 2% [13 words]Michael GreenbergNov 10, 2010 16:14
suddenly a flip flop [16 words]johnnyNov 7, 2010 00:45
⇒ Tax expenditures versus Rates [179 words]LyleNov 6, 2010 23:55
Flat tax [188 words]joecoolNov 8, 2010 10:52

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