Free Republic

Incoming state Assembly Speaker Karen Bass on Tuesday said one way to solve California's continual budget mess is to revamp the state's tax code, possibly raising income taxes on the wealthy, levying sales taxes on services and closing tax loopholes. In an interview with The Associated Press, the Los Angeles Democrat said she wants a bipartisan panel to examine the code and recommend ways to change it. "The state of California is in a crisis," Bass said. "I want to set up a commission outside of the Legislature that will look at more long-term solutions and evaluate whether the tax...

Tax Policy: The "rebate" side of the economic stimulus package would split the nation about equally between payers and takers. Will we now get a taste of class warfare to come?Leona Helmsley once notoriously proclaimed that "only the little people pay taxes." Turns out she was wrong. Not only did the billionaire end up going to prison for federal tax evasion, she didn't even get the trend right. When it comes to federal income taxes, Leona's "little people" have been migrating off the rolls in large numbers for a couple of decades. Now it's the "big" (i.e., rich) people who...

WASHINGTON -- The IRS is making a big push this year to make sure certain taxpayers know they can take the earned income tax credit, a benefit for lower income workers and working families that goes unclaimed by up to 25 percent of those who are eligible.The EITC is intended to offset a portion of Social Security and Medicare taxes, thus boosting take-home income in low-wage jobs and providing an incentive to work. It's a "refundable" credit, meaning that after it is figured against your tax liability, the IRS sends you any money you're due.For 2007 tax returns, the maximum...

The Alternative Minimum Tax may be the all-time winner of Good Ideas Gone Bad award. Written to make sure tax-dodgers didn't pile up deductions to escape the IRS, it's now threatening to sweep in 25 million taxpayers, up from four million last year. This headache of a tax grew in scope thanks to inflation and rising incomes as lower-earners graduated into a higher tier. But it's also provided a stage for Congress to display a knack for feuding instead of fixing. The result could be a longer tax season, ample confusion and deepening voter resentment. Since it was passed in...

Republicans have rejected a request by Majority Leader Harry Reid (D-Nev.) that the Senate approve by unanimous consent a one-year patch to the Alternative Minimum Tax (AMT) with no accompanying tax increases. Democrats quickly made political hay of the GOP move, which contradicted earlier Republican calls for extending tax relief with no offsets. Sen. Max Baucus (D-Mont.) blamed Republicans for obstructing tax relief, and called Reid’s request a “huge concession” on the part of Democrats. “If the AMT hits more taxpayers next year, it’s because of the Republican caucus. That’s clear,” said Baucus, who chairs the Senate’s tax-writing committee. Sen....

Washington – The Club for Growth praised Senator Fred Thompson for the release of his pro-growth tax reform plan this morning on Fox News Sunday with Chris Wallace. The seven-part plan is the most comprehensive tax reform plan offered to date by a presidential candidate. The plan will: Permanently extend the 2001 and 2003 tax cuts Permanently repeal the Death Tax Repeal the Alternative Minimum Tax Reduce the corporate tax rate to no more than 27% Permanently extend small business expensing Update and simplify depreciation schedules Expand taxpayer choice Most commendable is Thompson’s plan to expand taxpayer choice by adopting...

One advantage of having a subscription to The Atlantic is finding out what the Democrats propose to do next. Clive Crook in under the rubric of "The Agenda" wrote a recent article on homeownership called Housebound. After agreeing with some benefits of homeownership he then lists the reasons why this is a bad idea. Among his complaints are: Homeowners are less mobile. Homeowners act as cartels interfere with zoning changes, suppress new developments, etc. And, not the least is that they have an unfair advantage in mortage-interest deductions. The last of these, interest deduction for mortgage interest, seems to be...

Senior Democrat proposes U.S. tax overhaul Thu Oct 25, 2007 9:51am EDT WASHINGTON (Reuters) - The top U.S. congressional tax writer proposed sweeping tax legislation on Thursday that would repeal a tax for the rich that has been hitting more middle-class Americans and replace it with a new tax on high-income earners. The $1 trillion bill proposed by Rep. Charles Rangel, chairman of the Ways and Means Committee in the U.S. House of Representatives, would also reduce taxes for millions of middle- and low-income taxpayers. Private equity fund managers who pay a 15 percent capital gains rate on earnings from...

When 2008 rolls around, investors who anticipated a capital gains tax exemption on the sale of their investment real estate may run across a kink in their plans. HR 3648, a bill working its way through Congress, would alter the requirements for exemption on primary residences so that many investment properties will no longer qualify, leaving investors to pay a capital gains tax from which they would previously have been exempt.

Folks who move into their second homes and later sell won't get as big a tax break as they may be expecting, thanks to legislation that Congress will pass this fall. A provision in a pending mortgage relief bill blocks homeowners from excluding all of their gain on a second home, even if the home is sold more than two years after it becomes their primary residence. Here's how the change will work: Currently, you can sell your primary residence and exclude up to $500,000 of gain ($250,000 for singles) if you lived there for two out of the past...

The Tax Foundation has published Summary of Latest Federal Individual Income Tax Data: New data released by the IRS today offers interesting insights into the distributional spread of the federal income tax burden, new analysis by the Tax Foundation shows. The new data shows that the top-earning 25% of taxpayers (AGI over $62,068) earned 67.5% of the nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86%). The top 1% of taxpayers (AGI over $364,657) earned approximately 21.2% of the nation's income (as defined by AGI), yet paid 39.4% of...

<p>Manchester – Calls to abolish the Internal Revenue Service and repeal the Constitutional amendment that established the federal income tax drew loud applause yesterday for Republican presidential candidate Ron Paul.</p> <p>The Texas Congressman drew an eclectic mix of more than 500 supporters -- young and old, Libertarians and anti-war Democrats, independents and conservative Republicans -- who cheered his message of limited government, low taxes, free markets, bringing the troops home from Iraq, and returning to a monetary policy based on the gold standard.</p>

John Dingell proposes not only a huge gas tax but also ENDING THE HOME MORTGAGE DEDUCTION for “large” homes–all this to fight global warming change. (Pause. Laugh. Roll eyes.) Now, Dingell’s not serious about any of this–he said as much over the summer on the Sunday talk shows. He says he just wants to get the discussion going–and, if my memory is correct, he also said that he wants to show others that it’s impossible to pass this kind of stuff. But just now he’s acting serious about it. As a conservative/libertarian, this is wonderful news to me. There is...

A Tax Break for Driving to Work? The Fair Tax Will Fix This By Herman Cain August 20, 2007 There is a little-known deduction in the tax code that 400,000 people know about, and by which they avoid $150 million dollars in taxes each year. The issue is not that most of us do not know about this little sneak-a-tax, or even the amount that the rest of us are picking up through a higher federal deficit. The issue is that this is another example of how the tax code is used to encourage a desired behavior. The deduction encourages...

People often laugh when I say on the campaign trail that the tax code should be taken behind the barn and killed with a dull axe. In fact, one man in Iowa was so excited by this proposal that he presented me with an axe before I finished my remarks (fittingly, I was speaking in a barn). There's a reason people welcome my proposal to kill the tax code -- it's a monster of inscrutable complexity, and I say that as a former lawyer who took every tax law class I could. Today's tax code -- which is sixteen times...

NEW YORK, June 26 -- Warren E. Buffett was his usual folksy self Tuesday night at a fundraiser for Sen. Hillary Rodham Clinton (D-N.Y.) as he slammed a system that allows the very rich to pay taxes at a lower rate than the middle class. Buffett cited himself, the third-richest person in the world, as an example. Last year, Buffett said, he was taxed at 17.7 percent on his taxable income of more than $46 million. His receptionist was taxed at about 30 percent.

A modest proposal: Let’s dump the entire tax code. Let’s gather all the tax documents we can find, put them in a big heap, and have a nationally televised Tax Code Burning Day. If the tax lobbies protest, toss them on the fire, too. Good riddance. Tax Code Burning Day is possibly a bit extreme, but the idea of chucking our income tax system has been around for quite a while. When I suggested 10 years ago that we were all suffering from TDB - Tax Debate Burnout - 5,000 readers agreed. They sent in letters and postcards in support...

While Americans struggle to comply with one of the world’s most complicated tax codes, it’s worth noting that about one-dozen nations have adopted simple and fair flat-tax systems. Hong Kong has had a flat tax for nearly 60 years, and has gone from being one of the poorest places on the planet to a first-class economic powerhouse. Even the rulers in Beijing who now control the former British colony are smart enough to realize that it would be foolish to change course and kill the proverbial goose. Too bad American politicians aren't as economically astute as Chinese communists. Congress occasionally...

Behold the simple virtues of a fair national sales tax : Tax code is a disgrace that needs an overhaul By LEO LINBECK WITH millions of Americans once again struggling to complete their federal income taxes, it is a good time to reflect on the profoundly dysfunctional and highly punitive federal tax code that only gets more complicated year after year. ADVERTISEMENT The patchwork quilt of tax loopholes, exclusions, adjustments and various forms and schedules that we all struggle to understand is a reflection of the wholesale auctioning off of the tax code over the last several decades into the...

WASHINGTON (AP) -- Dissatisfaction remains high after numerous changes in tax law since the late 1980s. The Reagan administration led a tax overhaul two decades ago that significantly lowered tax rates and eliminated or reduced several deductions. The first President Bush abandoned his "read my lips, no new taxes pledge" in a 1990 budget deal that raised taxes. The Clinton administration won passage in 1993 of a deficit-reduction measure that blended tax increases, budget cuts and rebates for the working poor. And the second Bush administration pushed successfully for tax cuts that lowered the top income tax rate to 35...