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To: Principled; muawiyah
What we don’t want to happen again is to lose deductions just to get a lower rate. That’s simple wealth redistribution ~ a marxist notion.
Yeah and later, the deductions won’t come back but the rate will sure increase! The singular attraction that I have for the flat income tax is that each person’s marginal rate is the same. Lots NOT to like about it but that one is big.
Having seen the ObamaCare abuse of the IRS, I think we all can see value in moving away from an income tax.

That aside, one deduction I would like to see eliminated is the mortgage interest deduction - and the taxability of interest income. That was the Steve Forbes position, and he clearly was right. Why? Because if everyone is in the same tax bracket, the tax paid on interest income is exactly balanced by the tax savings accruing to the payer of the interest. So it is all a bunch of paper shuffling - with the exception that some people don’t itemize deductions, and they lose out in the deal.

The realtors took down the Forbes presidential campaign over the issue, but Forbes should have rebutted by pointing out that municipalities already get the same break, and the result is that tax free bonds pay lower interest to compensate for the lack of a tax on them. So all Forbes really was proposing was that home buyers be able to “sell tax-free bonds” when they get their mortgage loans. Therefore it was really a benefit to the lower-income borrower, since he wouldn’t have to itemize the payments in order to benefit. Forbes should have instituted a grandfather clause for existing mortgages - and if the borrower wanted to have the new system, he would only need to refinance the mortgage to get it.


10 posted on 10/07/2012 5:37:53 PM PDT by conservatism_IS_compassion (The idea around which “liberalism" coheres is that NOTHING actually matters except PR.)
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To: conservatism_IS_compassion

The best way to avoid double taxation of the same money is to abolish the income tax completely.


11 posted on 10/07/2012 5:48:24 PM PDT by muawiyah
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