<p>Seventy five percent of capital gains would be tax free. (We have to protect the richest of the rich).</p>
<p>The mortgage deduction would be replaced with a tax credit. You would only get the credit on your primary residence and it would be limited so people who own expensive homes would have their credit capped. No credit for vacation homes or second homes.</p>
<p>State and local income taxes would not be deductible.</p>
<p>Don’t know about property taxes.</p>
<p>Tax-free employer-provided health insurance would no longer be tax free above a certain amount. (Maybe $11,000 a year). </p>
<p>The Alternative Minimum Tax will be dropped.</p>
<p>I caught this story on CNBC. I think it is accurate.</p>
<p>It’s just another battle in the Bush campaign of class warfare. Implement tax cuts where 90 percent of the benefit is to the rich. Then when the resulting deficit becomes too uncomfortable, cut back on deductions that benefit the middle class.</p>
<p>I do like the idea of simplification. Does simplification mean take away from me, give to somebody else?</p>
<p>I don’t understand this paragraph:</p>
<p>All businesses would pay at a rate equal to the top rate for individuals, eliminating current differences between large corporations and small businesses. Businesses would pay tax on the sale of all goods and services and receive no deductions except for wages paid. Interest, dividends and capital gains would be tax-free.</p>
<p>What does this mean? No deductions for costs of goods sold? How does that work?</p>
<p>When you look up the word “Bush” in the dictionary, isn’t the definition…“benefit the rich”?</p>
<p>TD and dstark, did you even look at the links? This looks like a proposal put together by a bipartisan group comprised of primarily outside experts. Its not even clear that Bush is endorsing the results, yet the Party of No instinctively says its bad and a gift to the rich. And you expect to win elections based on this platform of negativity?</p>
<p>Call me naive, but I think that some of the victims will be the fat and not so fat cats who live in the “tax and spend” states. Humm, could the Bush team have used that ever so funny Jesusland map and find a great retaliation tool? </p>
<p>But are those not exactly the states that decry tax cuts and ask for tax hikes … Thus, the elimination of the deductions ought to feel like deja vu all over again. Oops, my mistake: they mostly want OTHERS to pay more taxes. Always others like the rich and corporations. </p>
<p>On the other hand, I do not see how a system that would land 75% of the taxpayers in a 15% bracket is … again benefitting the rich. Why not look at the progressive tax systems of France, Belgium, or Sweden. I am REALLY wondering how little income one has to earn before leaving the 15% bracket, and how fast one would hit the 40% and above rates. </p>
<p>Does anyone REALLY believe that taxes on dividends and AMT are GOOD taxes for the middle class? </p>
<p>In the meantime, I would not hold my breath to see most of the proposals ever come through. I expect the real estate and financial lobbies to raise hell about any attack to the sacrosaint mortgage deductions. On the other hand, the proponent of the state taxes exclusions will have a much tougher battle.</p>
<p>Anything to get rid of the alternative minimum tax is a plus! More and more middle income people are getting hit by this tax. Ouch it really hurts too!!</p>
<p>I am absolutely appalled by this, as this so called “expert” panel has completely failed in its mission and has proposed more tweaking of an already disastrous system that is unsustainable.</p>
<p>Did anyone notice who these people are on this panel? Ex-politicians and university professors. No one on this panel has ever created a job, or knows what it means to produce a tangible product. </p>
<p>It’s clear to me that the lobbyists on K street had their way with these useful idiots, and I don’t care what party they are or are not aligned with.</p>
<p>The panel did not consider HR (and S) 25, the FairTax. Oh sure, they “examined” a sales tax, but they defined it in a way with so many restrictions and loopholes that it couldn’t help but be found wanting. If any of you really care about tax reform, go to <a href=“http://www.fairtax.org%5B/url%5D”>http://www.fairtax.org</a> and check it out. </p>
<p>Congressman Linder has introduced the legislation every session. He and Neil Boortz have written an easy to read and understand book called The Fair Tax Book. This book has been on the NYT non-fiction best seller list for the last 7 weeks, and people are contacting their representatives about it.</p>
<p>DS, I do not know much about taxes, but don’t the capital gains have an impact on investment and entrepreneurship that are the driving forces behind economic growth and job creation? </p>
<p>Did we not also have a capital gain tax cut in 1997? For some reason, I do not believe that the intent was to further enrich the fat cats. </p>
<p>I may be wrong on this, but doesn’t a lower capital gain tax help small business owners by allowing them to opt for different corporate structures, help them raise capital from outisders, and help keep more in case of a sale upon retirement. I am quite certain that small business owners are not necessarily fat cats.</p>
<p>Capital gains tax cuts help small businesses, but the cuts help the richest the most. The top 1 percent of this country is sitting on enormous wealth. The top 400 Forbes richest people own 6 percent of this country. Think about that. </p>
<p>Where do you want to get the revenues to run this country?</p>
<p>Who was John F. Kennedy’s father?</p>
<p>Teddy Kennedy once said, “Live like a republican. Vote democratic”.</p>
<p>I independently posted my “IRS figures” post without seeing this one. Just a couple of comments: Xiggi, I honestly think that the impact of minor changes in the tax code on people’s behavior is seriously overstated. People are going to want to start and grow businesses whether the capital gains tax is 10% or 35%. When building a business the takeout at the end is not the driving factor (unless you’re a scam artist, of course - then it’s the only factor!) Our national economy has bulled ahead, growing year after year, through tax cuts, tax hikes, rebates, surcharges, whatever. If you want to find a pattern (any pattern), I’m sure you can, just by selecting the right data. But I think that tax policy is a secondary player in the national economy. </p>
<p>Next: The revenue to pay for government services has to come from somewhere. A lot gets passed “off budget” by converting government services into “fees”. A lot has been passed on to future generations in the form of national debt lately. The rest has to come from us - the taxpayers. You can slice and dice how you figure it, but as a purely practical matter it makes most sense to base taxes on income, because for the most part our income is what we use to pay our bills. The wealthiest sector of society has become very adroit at coming up with plausible explanations for why they should pay less (hey, they can afford the best spinmeisters - they should have the best catch phrases.) But as the figures I posted under IRS show - their take home is about the same share of their income as everyone else’s.</p>
<p>“Xiggi, I honestly think that the impact of minor changes in the tax code on people’s behavior is seriously overstated. People are going to want to start and grow businesses whether the capital gains tax is 10% or 35%.”</p>
<p>Oh, I agree with that. </p>
<p>However, you also have to consider the potential venturers. After the 1997 capital gain tax, there was an explosion in venture capital. A lot of small business may start with an eye on the bottom line and select pass-through tax structures such as partneships or Limited Liability Corporations. However such structures are not preferred by outside investors. In other words, the capital for expansion or growth may be more costly or less available. A reduced capital gain tax may make the choice of the best structure less of an issue. </p>
<p>I do agree that it’s a shame when tax laws cause people to act differently than they would in a tax-neutral environment. I’ve seen too many people tie themselves in knots, and cause themselves grief, both financially and personally, because they were determined to avoid taxes. At times it seems like a phobia. My personal answer to the corporate vs. partnership tax differential would be to tax all business entities the same - and I’d tax them as partnerships are taxed, with all income and losses passed through to the owners. But that would be a pretty radical change at this point.</p>
<p>Not all of that venture capital sloshing around in the late '90s was invested exactly wisely. Sometimes “steady as she goes” is the best policy for handling the economy.</p>
<p>Xiggi, do any of the economists in textbooks talk about taxing labor? Why is that OK? Aren’t the workers the ones that buy the products that capitalists help finance? Who is going to sell anything if there aren’t any customers? Wouldn’t the economy grow stronger if workers didn’t pay any tax?</p>
<p>Dstark, what exactly was your position in the “stock market.” You certainly don’t reflect the values I saw working on Wall Street. Your posts are extreme and seem paranoid.</p>