I think we are missing the boat a little on the whole “tax increase” thing.
A lot of “tax breaks” are nothing more than redistribution of wealth in disguise, and have nothing to do with letting people keep more of their own money.
Some examples: Hybrid car tax credits. They take money from working americans, and use it to bribe people into buying the cars government wants you to buy.
Or College tuition tax credits — supposedly great if you have kids. Except everybody gets them, and the colleges know it. College is already setting their tuition to the price YOU are willing to pay. If government throws another $4000 into the pot, it doesn’t change what you were willing to pay. If you wanted college for $10,000, and now government throws in $4000, colleges raise their tuition to $14000. In the end, it’s not YOUR tax credit, it’s money paid to liberal universities pushing democratic philosophy.
In contrast, depreciation allowance at least does let companies keep more of their own money, because the money goes to the company that first earned it, and then did something with it.
And when government is spending almost twice the tax they take in, it’s not quite like killing the tax credits raises the amount we pay — the tax credits were coming out of borrowed money.
So I think we really do need to go through all the various tax credits and see which ones are really spending in disguise. It’s not hard — if the tax credit or deduction is paid to people who do exactly what government wants them to do, that they might not otherwise do, it’s really government spending through a 3rd party.
In contrast, depreciation allowance at least does let companies keep more of their own money, because the money goes to the company that first earned it, and then did something with it.
“Or College tuition tax credits — supposedly great if you have kids. Except everybody gets them”
This phases out at a certain income level. I had TWO kids in school and couldn’t get any of it because of our income level. Had to wait until the wife retired this year to lower our income.