CDZ Should tax reform be revenue neutral?

[320 Years of History]

Simple yes/no question. It doesn't matter why you think tax reform should be revenue neutral or why you think it should not be revenue neutral.

1. Look at the definition of the term -- you can research it yourself if you want to, but there's not much to research.
2. Evaluate for yourself whether tax reform/changes should be revenue neutral or not.
3. Answer the question, yes or no, in accordance with the preponderance of where your opinion falls after considering what the term means and what its implications are and are not.

What does revenue neutral mean?

The term Revenue Neutral implies changes in the tax laws that result in no change in the amount of revenue coming into the government's coffers. In other words, a tax proposal is revenue neutral if it neither increases nor decreases tax revenues when compared to existing law. For instance, a revenue neutral provision may require individuals to pay less tax, but corporations will pay correspondingly more taxes. The concept was the decisive factor in drafting the Tax Reform Act of 1986 “whereby provisions estimated to add revenue were offset by others estimated to reduce revenue, so that on paper the new bill would generate the same amount of revenue as the old tax laws.”
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For the sake of the thread and poll:

• Corporate income taxes are taxes assessed and paid by organizations that are incorporated...S Corp or C Corp, it doesn't matter between the two, but the meaning is limited to one or the other of the two.
• Personal income taxes are everything else....that is, taxes paid by individuals, couples, groups, and folks whose business income and losses pass through to them and the business taxes are assessed and paid as part of one's personal or joint income tax filings/payments. Given the IRS' regulations, LLCs are included here and not with corporations.

 

[emilynghiem]

I find the whole tax system needs to be cleaned up, since so much has been added to federal govt and funding that not all groups agree are Constitutional. There are better ways to fund programs to allow local accountability. And I find this is especially necessary in areas of conflict where beliefs are involved that make it nearly impossible to agree on funding a common policy, or else it reduces the common portion to very minimal. The rest that people don't agree on can be reorganized and funded on other levels of govt or other ways to avoid fighting over nationalized policy for issues better handle through localized or privatized levels for democratic representation and protection of equal interests, given our diverse populations and affiliations both religiously and politically.

The Libertarians suggest the federal govt neutrally pass money back to the states proportionally to manage their own programs instead of deciding this federally. After all the debates over health care, birth control and abortion laws through federal govt, same sex marriage benefits, and now bathroom policies in public schools, I have proposed dividing this by party and allowing tax investments and writeoffs by members choosing their own programs to fund and support, so they quit fighting to control each other's agenda. I think the free choice in funding policies that represent one's beliefs is best done by investing directly and deducting it from taxes. This can be done through churches, businesses, schools, nonprofits, or political parties and organizations.

If we did more management of public services locally, then perhaps we could reduce the taxes paid to federal govt to something more manageable and stick to core areas such as national security that can't be done locally.

 

[320 Years of History]

There are better ways to fund programs to allow local accountability.

What are the better ways?

federal govt neutrally pass money back to the states

Well, okay, but that's not tax reform. The suggestion you've made addresses how collected tax revenue is spent. Taxation is about collecting the money, how much, from whom, in what proportion, and at what frequency, not spending the money.

 

[alang1216]

Yes, corporate and personal income tax reform should be revenue neutral. If it isn't it will never get passed.

In truth the point is moot since the day after the tax code is reformed, Congress will add a special interest tax break/provision for something and the whole process will start over again. Congress' power is in the purse and they won't voluntarily give it up.

 

[320 Years of History]

Yes, corporate and personal income tax reform should be revenue neutral. If it isn't it will never get passed.

In truth the point is moot since the day after the tax code is reformed, Congress will add a special interest tax break/provision for something and the whole process will start over again. Congress' power is in the purse and they won't voluntarily give it up.

Red:
??? I have no idea where you're going with the "red" comment or what it has to do with the thread topic.

Power of the Purse:
The thread topic/question doesn't propose or hint at discarding, altering or discussing Congress' power to levy taxes. In addition to the power to levy taxes, "power of the purse" has to do with how tax revenue is spent, not how it's collected. Revenue neutrality is about (1) how much tax revenue is collected in comparison to how much is currently collected and (2) from whom it's collected.

 

[alang1216]

Yes, corporate and personal income tax reform should be revenue neutral. If it isn't it will never get passed.

In truth the point is moot since the day after the tax code is reformed, Congress will add a special interest tax break/provision for something and the whole process will start over again. Congress' power is in the purse and they won't voluntarily give it up.

Red:
??? I have no idea where you're going with the "red" comment or what it has to do with the thread topic.

Let try and explain then. The Congress' power of the purse is about how much revenue is raised through taxes and fees but it is equally about the exact opposite, how much tax is forgiven. Giving tax breaks to certain industries, for example to high-cost, gas producers to encourage production, is Congress using the power of the purse to exert their influence. For the private taxpayers it may be a deduction for mortgage interest to encourage home ownership. It is these tax breaks that have complicated the tax code and that I presume is the target of tax reform and every one has a group supporting it.

 

[320 Years of History]

Yes, corporate and personal income tax reform should be revenue neutral. If it isn't it will never get passed.

In truth the point is moot since the day after the tax code is reformed, Congress will add a special interest tax break/provision for something and the whole process will start over again. Congress' power is in the purse and they won't voluntarily give it up.

Red:
??? I have no idea where you're going with the "red" comment or what it has to do with the thread topic.

Let try and explain then. The Congress' power of the purse is about how much revenue is raised through taxes and fees but it is equally about the exact opposite, how much tax is forgiven. Giving tax breaks to certain industries, for example to high-cost, gas producers to encourage production, is Congress using the power of the purse to exert their influence. For the private taxpayers it may be a deduction for mortgage interest to encourage home ownership. It is these tax breaks that have complicated the tax code and that I presume is the target of tax reform and every one has a group supporting it.

Okay...Even assuming everything you wrote is factually accurate, the thread topic has nothing to do with whether Congress should yield any of its power of the purse. The thread topic and poll question addresses whether thinks the the tax provisions Congress passes should or should not be revenue neutral.

 

[FA_Q2]

Yes, corporate and personal income tax reform should be revenue neutral. If it isn't it will never get passed.

In truth the point is moot since the day after the tax code is reformed, Congress will add a special interest tax break/provision for something and the whole process will start over again. Congress' power is in the purse and they won't voluntarily give it up.

Red:
??? I have no idea where you're going with the "red" comment or what it has to do with the thread topic.

Let try and explain then. The Congress' power of the purse is about how much revenue is raised through taxes and fees but it is equally about the exact opposite, how much tax is forgiven. Giving tax breaks to certain industries, for example to high-cost, gas producers to encourage production, is Congress using the power of the purse to exert their influence. For the private taxpayers it may be a deduction for mortgage interest to encourage home ownership. It is these tax breaks that have complicated the tax code and that I presume is the target of tax reform and every one has a group supporting it.

Okay...Even assuming everything you wrote is factually accurate, the thread topic has nothing to do with whether Congress should yield any of its power of the purse. The thread topic and poll question addresses whether thinks the the tax provisions Congress passes should or should not be revenue neutral.

True - not necessarily the topic posted but it is closely related to the very basis of tax reform itself.

 

[FA_Q2]

There is zero reason to confine proper and necessary tax reform to an arbitrary number of dollars collected. Revenue neutral is both a political talking point to defend from having to support a particular tax reform and a method to make tax reform easier in and of itself.

 

[320 Years of History]

There is zero reason to confine proper and necessary tax reform to an arbitrary number of dollars collected. Revenue neutral is both a political talking point to defend from having to support a particular tax reform and a method to make tax reform easier in and of itself.

Perhaps. I think revenue neutrality is simpler than that. I think it's a talking point for not increasing the sum a government collects those it taxes. In an economic environment characterized by routinely increasing prices, revenue neutrality can act as a limit on what initiatives a government can afford to undertake and often necessarily militates for borrowing money, since it cannot be currently collected from taxpayers, if the polity nonetheless wants new/additional "things" to be done by their government.

 

[alang1216]

Okay...Even assuming everything you wrote is factually accurate, the thread topic has nothing to do with whether Congress should yield any of its power of the purse. The thread topic and poll question addresses whether thinks the the tax provisions Congress passes should or should not be revenue neutral.

Then I stand by my original answer: revenue neutral or it won't happen. Regardless, I predict the reforms will be temporary unless Congress changes the way it does business and that is an even bigger reform.

 

[FA_Q2]

There is zero reason to confine proper and necessary tax reform to an arbitrary number of dollars collected. Revenue neutral is both a political talking point to defend from having to support a particular tax reform and a method to make tax reform easier in and of itself.

Perhaps. I think revenue neutrality is simpler than that. I think it's a talking point for not increasing the sum a government collects those it taxes. In an economic environment characterized by routinely increasing prices, revenue neutrality can act as a limit on what initiatives a government can afford to undertake and often necessarily militates for borrowing money, since it cannot be currently collected from taxpayers, if the polity nonetheless wants new/additional "things" to be done by their government.

Well, yes that is what it is politically used for. The question was weather or not that was a correct stance to take though (at least that is what I was interpreting it as) and I think that is clearly a poor stance.

It is easier to do in our current political environment because of party positioning but ultimately it is a piss poor idea to hang onto. The idea that proper reform should be constrained is silly in its very essence.

 

[FA_Q2]

Okay...Even assuming everything you wrote is factually accurate, the thread topic has nothing to do with whether Congress should yield any of its power of the purse. The thread topic and poll question addresses whether thinks the the tax provisions Congress passes should or should not be revenue neutral.

Then I stand by my original answer: revenue neutral or it won't happen. Regardless, I predict the reforms will be temporary unless Congress changes the way it does business and that is an even bigger reform.

It wont happen at all period.

Congress is not about to submit the vast social engineering powers (and subsequently enrich its own members) it has because it is right or better for the nation.