The Way Forward: End Tax Expenditures

Discussion in 'Politics' started by g5000, Nov 19, 2012.

  1. g5000
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    g5000 Diamond Member

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    Since there has been a lot of talk lately about Obama won because he gave gifts to negroes, I am thinking this is the perfect opportunity to discuss the biggest government gift-giving of all: tax expenditures.

    Tax expenditures are the government's way of spending money without appropriating it. They are called all sorts of other names. Loopholes, credits, boondoggles, deductions, etc.

    Two people can earn the exact same pay, but one pays less taxes than the other because they bought a house or have kids.

    The more wealthy you are, the bigger deduction you get for buying a bigger house. This means the mortgage interest rate deduction is a hugely regressive tax.

    Last year in Congress, the bipartisan Joint Committee on Taxation determined that tax expenditures cost the government $1 trillion dollars a year.

    That $1 trillion that some people are getting off the hook for has to come out of someone else's hide.

    It's time to end this practice once and for all.

    Tax expenditures are much easier to hide than, say, Obama's plan to raise the income tax margins for the top 2 percent.

    A tax expenditure can be hidden by a bought off Congressman as a rider to just about any bill that is in the pipeline. The expenditure doesn't even have to do with anything that the bill it is riding on is about!

    The right bitches about "gifts". The left bitches about "fair share". Eliminating tax expenditures kills both bitches with one stone.

    If you earn $50,000 and your neighbor earns $50,000, you could both rest assured you are paying the same amount of taxes.

    And for resource purposes, here are the figures for tax revenues, outlays, and the amount of surplus or deficit for each year:

    Historical Federal Receipt and Outlay Summary

    I have calculated the percentage of growth or reduction of federal revenues from the period one year after Clinton took office to the most current year.

    1994: +9%
    1995: +7.4%
    1996: +7.4%
    1997: +8.7%
    1998: +9%
    1999: +6.1%
    2000: +10.8%
    2001: -1.7%
    2002: -7%
    2003: -3.9%
    2004: +5.5%
    2005: +14.5%
    2006: +11.8%
    2007: +6.7%
    2008: -1.8%
    2009: -16.7%
    2010: +2.7%
    2011: +6.5%



    There were two Bush tax cuts:
    Economic Growth and Tax Relief Reconciliation Act of 2001 - Wikipedia, the free encyclopedia
    Jobs and Growth Tax Relief Reconciliation Act of 2003 - Wikipedia, the free encyclopedia


    I think attributing the amount of federal receipts solely to tax rates is a Single Cause Fallacy. There were clearly other, greater economic factors affecting the amount of money the government took in.

    When considering tax revenues, it should also be noted that the financial services sector ("Wall Street") at the peak of the derivatives bubble accounted for nearly 40 percent of all corporate profits in the United States.

    That single sector has since returned to one third of all US corporate profits.

    You can see below how their fortunes track very closely to the growth, reduction, and regrowth in federal revenues:


    [​IMG]


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    Last edited: Nov 19, 2012
  2. AmyNation
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    AmyNation Road Warrior Supporting Member

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    Very interesting thread. However, since it doesn't call Obama the anti-Christ or bemoan the intelligence of the American people, I doubt most of the posters here care.
     
  3. OKTexas
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    OKTexas New Life Member of the NRA 12/15 Supporting Member

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    Yep, the government should get out of the business of social engineering through the tax code. Taxes should be determined only on income, not how you chose to spend it. A simple flat tax should be chanrged on every dollar earned with no exemptions, exclusions or deductions so every wage earner has skin in the game.
     
  4. g5000
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    g5000 Diamond Member

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    When adjusted for inflation, tax expenditures have literally doubled since Ronald Reagan was elected.

    It is important to understand that for every dollar someone does not pay, somoene else has to pay that dollar, and that means higher tax margins.


    If a Congresscritter cannot add any tax expenditures to the tax code, then the money contributed to re-elect Congresscritters so they will create expenditures for their friends will come to a screeching halt, without any need for campaign finance reform.

    You reform a broken system by removing those avenues which are wide open to tempation and corruption.



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  5. Soggy in NOLA
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    Soggy in NOLA Platinum Member

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    I lost interest when he went off into the "gifts to Negroes" nonsense.

    Whatever.
     
  6. g5000
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    g5000 Diamond Member

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    H.R. 6169

    Why have we not heard of this bill on this forum?

    Too busy being hacks, I guess.

    Notice it was sponsored by Republicans.

    Wide open corruption.


    Not a peep on here about this great idea.

    They do leave expenditures for married people and families with children, which just leaves the door open for the entire system to be corrupted again with future expenditures:


    But at least this is a start.

    .
     
    Last edited: Nov 19, 2012
  7. g5000
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    g5000 Diamond Member

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    I think you lost interest because it was too much reading.

    Romney did say Obama won because he gave gifts to black and Hispanics.


    That claim is nonsense.

    He won because the right does not know how to propound superior ideas and defend them.


    .
     
    Last edited: Nov 19, 2012
  8. akelch
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    akelch Senior Member

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    I love the idea...but it does distract from the real issue...taxing productivity.
    If we compromise today they can change it tomorrow.

    We always talk about "steps in the right direction" but we stop short in saying what the end goal is.

    I want all taxes that tax productivity, investment, and savings to be abolished. If we have to take "steps" to accomplish this, so be it, but the goal should be clear.
     
    Last edited: Nov 23, 2012
  9. The Rabbi
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    The Rabbi Diamond Member

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    This is incorrect. Romney had superior ideas. He did a good job of explaining them. Obama promised free stuff and told people Romney was a meany because he wouldn't give them free stuff. So people voted Obama.
    Stupid is as stupid does.
    Anyway, a big YES to making the tax code fairer and more transparent. One thing you didnt mention is eliminating this crap would also be an effective tax cut in terms of the amount of time needed to prepare returns.
     
  10. Ernie S.
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    Ernie S. Platinum Member

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    There's your problem right there. The way it should be, is that for every dollar someone doesn't pay, the government should spend one less dollar.

    Tax "expenditures" are an attempt at social engineering. The mortgage interest deduction was put in place to encourage people to buy houses, thereby increasing their wealth and employing construction workers.

    For some reason. Liberals attack mortgage interest deductions, but are pretty free with tax credits for buying the "right" car, windmills and solar panels.
    I am against using the tax code as a social engineering tool, but then, I have no mortgage, no dependent children, no Volt in the driveway or solar panels on my roof.

    What deductions, credits, loopholes do you want to eliminate, and which do you want to keep?
     

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