Re: [FairfieldLife] Bush Tax Panel Recommendations
akasha_108 wrote: Bush may spearhead major tax reform that provides substantial growth impetus to the economy. Proposals may include substantially reducing one of the biggest sinkholes for productive capital, the home mortgage deduction, and offsetting that with elimination of double taxation of investment income -- another current drain on productive capital. A win/win tradeoff for long-run economic growth. Also proposed are the elimination or restriction of tax preferences / incentives already embedded in the law -- essentially corporate welfare -- this along with the resulting simplification of the tax code is another great boon for economic growth. Bush Panel May Curb Tax Breaks for Homeowners, Health (Update3) Anything that Bush touches isn't trustworthy. Oct. 11 (Bloomberg) -- President George W. Bush's tax advisory panel, rejecting a fundamental overhaul, agreed to recommend limiting tax breaks for homeowners and employer- provided health-care benefits to help pay for repealing the alternative minimum tax. The panel, meeting in Washington today, agreed the current $1 million cap on deductible mortgage interest should be reduced, possibly to about $350,000, and that the deduction should yield no more than a 25 percent tax savings, down from a top savings now of about 35 percent. I would have to review how this would effect me (as well as millions of others) as probably wouldn't be able to afford my house without the deduction. I definitely at my age (58) am not going to work too jobs to pay for it. You will probably find strong opposition on this from the Realtor associations so it won't go anywhere. The panel also said it would probably recommend capping tax deductions for employer-provided health-care plans. Current law allows employers to deduct the value of premiums paid on behalf of their workers without the benefit being considered taxable income to the employee. The panel discussed placing the cap at the maximum amount the federal government pays in premiums for its workers, currently about $11,000. Yes, employer health premiums are ridiculous. A good argument for a single payer system. I noted at the company I worked at my employees would go running to the doctor for any little thing which if they were made to cover some of the cost they wouldn't. There is agreement that there is abuse of many of these healthcare benefits. ``These are the things we're looking at,'' said panel Vice Chairman John Breaux, a Democrat and former senator from Louisiana. ``We have a concept. We know where to go. We just don't have the details.'' Both changes would preserve the incentives for lower-and middle-income workers while curbing them for wealthier Americans who are getting a disproportionate benefit, panelists said. Good but I would need to study the details more. Breaux said such ``tough choices'' would raise ``a generous amount'' of taxes to help offset the $1.3 trillion cost of repealing the alternative minimum tax, he said. The minimum tax, imposed in 1969 to ensure that 200 wealthy families didn't escape tax with excess deductions, is now forcing millions of middle- income families to pay higher taxes because it was never indexed for inflation. Then should have been amended to be indexed with inflation. But I would favor get rid of some of the loopholes the rich have instead. No Sales Tax The panel decided not to endorse a national sales tax in its final recommendations and most panel members expressed reservations about a European-style value-added tax, which is in place in most industrialized countries. Yes but simpler to manage. Both systems would disproportionately hurt the poor, panelists said, and some members such as Chairman Connie Mack, the former Republican senator from Florida, and former Minnesota Representative Bill Frenzel said they worry a value-added tax would make it too easy for the government to raise money and increase spending programs. Mack asked the panel's staff to devise a specific proposal that would layer a value-added tax on the current system and reduce individual and corporate income tax rates. Still, he said that as the panel's work begins to wrap up, it's looking more and more to making changes within the current system. Value-Added Tax ``We're getting focused down on the income tax here,'' Mack said. In a later interview, he added, ``I would be surprised if we were to conclude that we want to offer a value-added tax proposal to the president.'' The panel increasingly is looking to eliminate or restrict tax preferences already embedded in the law. David Walker, the head of the Government Accountability Office, said Sept. 23 that uncollected revenue because of the incentives tripled since 1974 to $730 billion. The biggest embedded tax breaks subsidize housing and health care, Walker said. Every year even with a tax preparer I have to do too much bookkeeping for my tastes. I am more right brained than
[FairfieldLife] Bush Tax Panel Recommendations
Bush may spearhead major tax reform that provides substantial growth impetus to the economy. Proposals may include substantially reducing one of the biggest sinkholes for productive capital, the home mortgage deduction, and offsetting that with elimination of double taxation of investment income -- another current drain on productive capital. A win/win tradeoff for long-run economic growth. Also proposed are the elimination or restriction of tax preferences / incentives already embedded in the law -- essentially corporate welfare -- this along with the resulting simplification of the tax code is another great boon for economic growth. Bush Panel May Curb Tax Breaks for Homeowners, Health (Update3) Oct. 11 (Bloomberg) -- President George W. Bush's tax advisory panel, rejecting a fundamental overhaul, agreed to recommend limiting tax breaks for homeowners and employer- provided health-care benefits to help pay for repealing the alternative minimum tax. The panel, meeting in Washington today, agreed the current $1 million cap on deductible mortgage interest should be reduced, possibly to about $350,000, and that the deduction should yield no more than a 25 percent tax savings, down from a top savings now of about 35 percent. The panel also said it would probably recommend capping tax deductions for employer-provided health-care plans. Current law allows employers to deduct the value of premiums paid on behalf of their workers without the benefit being considered taxable income to the employee. The panel discussed placing the cap at the maximum amount the federal government pays in premiums for its workers, currently about $11,000. ``These are the things we're looking at,'' said panel Vice Chairman John Breaux, a Democrat and former senator from Louisiana. ``We have a concept. We know where to go. We just don't have the details.'' Both changes would preserve the incentives for lower-and middle-income workers while curbing them for wealthier Americans who are getting a disproportionate benefit, panelists said. Breaux said such ``tough choices'' would raise ``a generous amount'' of taxes to help offset the $1.3 trillion cost of repealing the alternative minimum tax, he said. The minimum tax, imposed in 1969 to ensure that 200 wealthy families didn't escape tax with excess deductions, is now forcing millions of middle- income families to pay higher taxes because it was never indexed for inflation. No Sales Tax The panel decided not to endorse a national sales tax in its final recommendations and most panel members expressed reservations about a European-style value-added tax, which is in place in most industrialized countries. Both systems would disproportionately hurt the poor, panelists said, and some members such as Chairman Connie Mack, the former Republican senator from Florida, and former Minnesota Representative Bill Frenzel said they worry a value-added tax would make it too easy for the government to raise money and increase spending programs. Mack asked the panel's staff to devise a specific proposal that would layer a value-added tax on the current system and reduce individual and corporate income tax rates. Still, he said that as the panel's work begins to wrap up, it's looking more and more to making changes within the current system. Value-Added Tax ``We're getting focused down on the income tax here,'' Mack said. In a later interview, he added, ``I would be surprised if we were to conclude that we want to offer a value-added tax proposal to the president.'' The panel increasingly is looking to eliminate or restrict tax preferences already embedded in the law. David Walker, the head of the Government Accountability Office, said Sept. 23 that uncollected revenue because of the incentives tripled since 1974 to $730 billion. The biggest embedded tax breaks subsidize housing and health care, Walker said. The details of the mortgage interest and health care proposals will be ironed out next week, Mack said. He said the proposals are ``clearly redistributing'' the tax benefits for homeownership and health care to lower-income Americans. Lower-Income Homeowners Tax breaks for homeownership particularly help the wealthy while lower-income people don't get enough benefits, said panelists such as Liz Ann Sonders, the chief investment officer at San Francisco-based Charles Schwab Corp. The current incentives, including the fact that most home sales are tax-free, are driving up home prices, making them unaffordable or pushing lower-income borrowers to take out risky mortgages. ``We are starting to see some significant pain here,'' Sonders said. The panel agreed to a proposal by former IRS Commissioner Charles Rossotti to make it easier for lower income Americans to get a tax break for donating money to charity. Investment Income The panel may compensate wealthier Americans who lose some of those benefits by reducing or repealing taxes on investment income. Mack said that proposal would
