Tag: taxes

Romney’s taxes as a campaign issue

Romney’s taxes as a campaign issue

I don’t know about you, but I’m tired of hearing about Mitt Romney’s taxes or his lack of transparency on that issue. The Democrats are not satisfied and it would be nice if he was more transparent about it. But I think it should be a closed issue.

There is no reason to believe he is doing anything illegal. He says he is just taking legal steps to which he is entitled to pay no more tax than necessary. Isn’t that pretty much what we all do? He does have a much higher income than most of us so he is able to hire better tax advisers and some steps make economic sense when dealing with a potential tax liability of millions rather than the smaller amounts that most of us deal with.

Perhaps the fact that a multimillionaire pays a lower tax rate than someone who makes a middle class salary suggests to some that our tax system is a bit unfair and should be reformed but that is a different argument.

Trust me and trust Congress

Trust me and trust Congress

Mitt Romney has a plan to fix the economy. It is just that he won’t tell us exactly or even approximately what it is. He will cut taxes for everyone while reducing the deficit and the economy will boom.

Unfortunately he will not tell us how he will manage to cut tax rates while reducing the deficit except to say that he will eliminate nonspecified loopholes and deductions. Paul Ryan seems to have a similar plan with unspecified details. Should they be called the “Trust Me Team”?

It seems they will work with Congress to specify some of those loopholes and deductions. So our role is to trust them and trust Congress. Congress certainly hasn’t done much lately to earn our trust.

So trust them and trust Congress. Does anyone else see a flaw in this plan ?

Romney and low tax rates

Romney and low tax rates

As previously mentioned, Mitt Romney promises to lower tax rates but has not specified how he would make up for the loss of revenue to the federal government. He has has suggested that he would be able to do this by closing loopholes and and eliminating deductions (but has not specified which ones).

Here is a suggestion. How about eliminating the lower rate paid on dividend and capital gains (as opposed to wages)?

To quote President Ronald Reagan:

We’re going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary, and that’s crazy. It’s time we stopped it.

Romney and the mortgage interest deduction

Romney and the mortgage interest deduction

Mitt Romney promised to lower tax rates but make up for the loss of revenue to the federal government by eliminating deductions and loopholes he has not specified.

According to Bloomberg Businessweek, the GOP platform committee has committed to retain the deductions for charitable donations but will not commit to retaining mortgage interest deduction. In 2008, they did commit to retaining mortgage interest deduction.

Would the Romney-Ryan team care to enlighten regarding their plans for the mortgage interest deduction ?

Name that socialist, a taxing question about partisanship

Name that socialist, a taxing question about partisanship

I want to begin with a quote.

We’re going to close the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share. In theory, some of those loopholes were understandable, but in practice they sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary, and that’s crazy. It’s time we stopped it.

And the way I see it, if our current tax structure were a TV show, it would either be “Foul-ups, Bleeps, and Blunders,” or “Gimme a Break.” If it were a record album, it would be “Gimme Shelter.” If it were a movie, it would be “Revenge of the Nerds” or maybe “Take the Money and Run.” And if the IRS, Internal Revenue Service, ever wants a theme song, maybe they’ll get Sting to do, “Every breath you take, every move you make, I’ll be watching you.”

What we’re trying to move against is institutionalized unfairness. We want to see that everyone pays their fair share, and no one gets a free ride. Our reasons? It’s good for society when we all know that no one is manipulating the system to their advantage because they’re rich and powerful. But it’s also good for society when everyone pays something, that everyone makes a contribution.

After all, we’re all citizens, equal in the eyes of the law, and equal in the eyes of God. You’re given a lot of benefits when you’re born in the U.S.A, but you’re given a responsibility, too, a responsibility to do your part and become a contributing member of the American family and an equal partner in America, Incorporated. When you pay your taxes, you buy your shares. And every year you get to vote on who should be on the board of directors.

Now, you’ll be hearing more about our tax proposals over the next few weeks. A great debate has begun, and there will be much talk, pro and con. And that’s good, that’s what America’s all about.

Who said that? If you are of a certain political persuasion, you might have guessed it was that socialist Barack Obama. Or maybe it was a quote from a socialist newspaper or some other left wing politician. But it was Ronald Reagan at Northside High School in Atlanta, Georgia on June 6, 1985. The entire speech is in the Reagan archives maintained by The University of Texas at Austin.

I have 2 points. The Republican view of taxation was very different in Ronald Reagan’s day. And because the Republican party has moved so far to the right, the 2 parties cannot even have a serious discussion of this or other issues .

The extreme partisanship in the electorate is bad. The extreme partisanship in Congress is damaging. Perhaps, one of the things we need to think about in the election this fall is reducing extreme partisanship. Think about which candidate for any office is willing to debate and compromise.

Huntsman Beats Obama

Huntsman Beats Obama

Jon Huntsman beats Barack Obama in making public a jobs plan. President Obama’s plan should be out in a few days. Gov. Huntsman’s plan has already been available for several days. It covers many aspects of the economy as would be expected as jobs are not an isolated issue and they are but a part of the larger economy. Here is the whole plan as a PDF as well as a blog entry on the candidate’s website that summarizes.

Let us hope more of the candidates come out with plans like this so we can have a debate on some ideas. I was a bit disappointed that parts of Huntsman’s plan were vague but I’m sure these points will be more fully explained in the near future.

The “no taxes” pledge or a higher duty

The “no taxes” pledge or a higher duty

To members of Congress concerned that the deficit ceiling or budget negiotiations may cause them to violate their “no taxes” pledge, please remember that you took a more important oath:

“I, (name of Member), do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”

The quote is from the House Member FAQ. Senators take a similar or identical oath.

do we need to destroy medicare  in order to save it

do we need to destroy medicare in order to save it

No doubt Medicare has a problem. We are told the funds available are not enough to pay the benefits promised. So do we need to destroy Medicare (as it is) in order to save it?

Can we reduce costs without impacting benefits? You occasionally read about really big frauds being found. Do we need to do more about preventing those or at least minimizing damage? Private insurers seem less subject to this type of fraud. What is their secret? Can we make the medical system more efficient and less coslty.

If the American people think we should keep Medicare benefits, do we need to find a better funding mechanism? Obviously paying a small percentage of your salary while working and getting heath care benefits for life after 65 is not a viable model in itself. Do we want to supplement this from general revenues or add another dedicated tax. Increasing the taxes on gasoline consumption or adding a carbon tax seems appropriate. We need to decrease our dependence on oil and other carbon producing eneny sources so a tax seems logical to me.

Do we want to decrease benefits? That is the other possible solution. I don’t agree with Rep. Ryan’s plan but at least it has moved us a bit more toward a discussion on this.

implications of tax compromise to delay Bush tax hike

implications of tax compromise to delay Bush tax hike

There is a very interesting exchange of views about the implications of the tax compromise to delay the Bush tax hike or extend the Bush tax cuts, depending on your point of view.

The HealthBeatBlog hosts a nice discussion of the implications of this tax compromise for Medicare, Social Security and Health Care Reform. The link is to Part 1. So more is coming and probably soon.

Health care debate: preexisting conditions and individual mandate

Health care debate: preexisting conditions and individual mandate

The Affordable Care Act (aka ObamaCare) includes a provision requiring individuals to have a certain level of health insurance or pay a penalty. This is commonly called the individual mandate. And is often thought needed for the health care law’s provisions preventing insurance companies from denying coverage to those with preexisting conditions.

Depending on who you listen to there has been either elation or disappointment over the news lately that a Virginia judge has ruled the individual mandate unconstitutional. Of course this one decision and the next judge could support it or disagree but one thing we do know is there will continue to be litigation on this and the issue may end up in the Supreme Court.

Striking down the individual mandate by the courts or perhaps a repeal of this provision would be bad news indeed for those who believe our health insurance system should cover preexisting conditions. It is possible that the individual mandate will be preserved (and some think it likely) but shouldn’t those who believe we should cover preexisting conditions be thinking about a Plan B just in case the individual mandate is out of the picture.

Bush tax hike delayed

Bush tax hike delayed

The delayed Bush tax hike (aka the Bush tax cuts) has been delayed by a compromise. I call them the delayed Bush tax hike because President George W. Bush gave us a temporary tax cut which would have expired this year giving us a tax hike. This was discussed in this blog a few days back as the Bush tax increase.

There have been numerous new articles and endless commentary on this on this so I won’t add much more for now, just point to 2 of the more interesting comments I have seen.

MAD from Forbes

Obama: President; McConnell: Sucker

Bush tax increase

Bush tax increase

Seems to me if George W. Bush could not find a way to make his tax cuts permanent, we cannot blame the present administration or Congress for not finding a way to extend these cuts during a recession. Should any increase now be called the Bush tax increase? Or perhaps the George W. Bush delayed tax increases.

It also bothers me that the Republican minority is holding up extending these tax cuts for the vast majority of citizens. If the majority in Congress cannot find a reasonable compromise with this very stubborn minority, I would have no problem with letting the entire tax cut expire on schedule. I think that would be bad for the economy and bad for the American people but preferable to allowing a minority to dictate policy and increasing the deficit to give a larger tax break to the richest Americans.

As I understand it if the tax break is limited to the first $250,000 of income, everyone still gets a tax break. It is just that the person who makes a million a year gets the same tax break as someone making a quarter of that.

Can’t Congress reach a reasonable compromise? – higher income cut-off, estate exemptions, temporary extensions, etc. I think the uncertainties about future income and estate taxes are more causing problems than any compromise I can imagine.