Tuesday, June 28, 2005

Tax reform

Reportedly (a little birdie told me), some people more in the know than I am are betting that the Tax Reform Commission will endorse neither the X-tax, which I would favor, nor the Graetz model, on which I’ve made my views clear, but rather will propose making various changes to the current income tax system. Some of the main possible features that I have heard about (plus my comments on them) are as follows:

1) Exemption for capital income plus elimination of interest deductibility. Even if you like consumption taxation, as I do under the right circumstances, impossible to comment on this without seeing exactly how it would be done, as the details are all-important. David Bradford, although a consumption tax advocate, would have classified lots of “capital income” (in the formal sense) as in fact representing returns to work that he wanted to tax. So a key question would be whether the plan’s design worked properly in this regard. Note also that something akin to interest deductibility would remain for home mortgage interest (see #3 below), potentially leading to arbitrage problems. (Borrow more against your home and get a credit, invest the funds and exclude the income.)

2) Replace personal exemptions with a single, unified child tax credit. I would argue that the credit should be made refundable (i.e., allowable even if in excess of current-year income tax liability). Dream on.

3) Replace various itemized deductions, such as those for charitable contributions and home mortgage interest, with percentage credits. In illustration, if these items became 15% credits, a taxpayer with $10,000 of home mortgage interest would save $1,500 of tax no matter what her marginal rate bracket. There often are good arguments for such an approach where the aim of a tax benefit is not income measurement, but something else such as influencing behavior (my NYU colleague Lily Batchelder has work in progress that will discuss this point). The Bradley-Gephardt tax reform bill that helped inspire the Tax Reform Act of 1986 had this feature. Once again, there could be arguments for refundability that I am sure will have to be ignored.

4) A $10,000 cap on the exclusion for employer-provided health insurance. I would once again say: why not a refundable percentage credit (e.g., 15% on health insurance value up to $10,000)? But an important virtue of this proposal, even if not turned into a credit, is that it addresses the incentive to over-insure – an important cause of our country’s growing healthcare crisis – without eliminating the nudge in the direction of having some insurance, which many would argue is socially desirable.

All in all, the plan could certainly be worse – a tribute, perhaps to good people on the Commission and staff, notwithstanding the constraints under which they are operating. But I tend to doubt that it will go anywhere, or that the Democrats will want to have anything to do with it under present political circumstances. Indeed, I would expect them to demagogue even its good features given where we are today after 4-1/2 years of Republican gutter politics.

349 comments:

1 – 200 of 349   Newer›   Newest»
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And this is tax simplification how? It just looks to me like shuffling the deck chairs on the titanic and slightly tweaking who gets what tax goodies... am I missing something?

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What are your 50,000 thoughts a day creating?
Our thoughts create our reality. This is a simple truth known by all people involved on the spiritual path. It is one of the most taught universal principles in the personal development field. Yet it is one of the most misunderstood!
People practice visualisation, affirmations, they use hypnosis, subliminal programming or countless other tools to transform their lives. However they fail to recognise one key area in their lives that hinder these wonderful techniques from being effective.
They sit day after day visualising their perfect scene and yet nothing happens. Why? They have followed all the instructions to the letter! They have chanted and imagined! They have formed a colourful, vibrant scene in their minds and affirmed that this is their reality. Then all of a sudden things get worse! What is going on?
Would you like to know the secret? Would you like to know why these people get no results? Would you like to hear one powerful statement that explains everything?
Yes?
Good. I will tell you why these people get no results or even opposite results to those they are aiming for -simply because of the following truth. Consciously controlled thoughts such as visualisations do not materialise - ALL thoughts materialise!!!
Most people believe that if they visualise for 10 minutes a day their lives will magically transform. This is not the case. You must change your core thinking. You think approx. 50,000 thoughts a day. How many of those thoughts are working against your ten minute visualisation?
You can control the thoughts that enter your mind by changing the way you view the world. You can decide which thoughts you give energy to and which thoughts you discard.
The thoughts that you follow and give energy to become more dominant than the thoughts you discard. Your subconscious mind records these as your dominant picture on the issue at hand. You then move towards this picture because your subconscious mind starts making your outside world reflect the picture that you have stored internally.
Your mind should be on whatever you want. The picture you need to have is a positive vision of you already having achieved your goal. To realise this vision you need to focus and concentrate. Remember thoughts are real, they create your reality.
Let's say you have been visualising a new house. You spend your ten minutes in meditation picturing yourself living in your dream home. You finish your session and get up feeling positive that you will achieve your goal. Then during the day you get a heating bill through the post and exclaim "Oh no look how expensive this is I cannot afford to heat this house". Where is your focus in the present moment? What are you affirming? You are telling your subconscious mind that you cannot deal with what you have. You are affirming that your life is not how you want it to be. If you knew without doubt that within a week you would be moving to your new home would you honestly be worried about a heating bill? Perhaps other doubts creep in like "I should be happy with what I have", or "I will never get this house looking the way I want it" and so on and so on.
These thoughts that are not aligned with your goal. You are not giving complete attention to what you want. Whilst you are dealing with these other lines of thought your attention is not on your goal.
If you are aware of your thoughts you will suddenly realise that you have spent much more energy on counter productive thoughts than on creating a dominant picture of the goal you want.
Point your focus in the direction of you're the life you want. Think about what you want NOT what you don't want. It's that simple.
Your focus determines your reality. Change your focus and you change your life. personal development

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Neurolinguistic Programming

In the early 1970s in America Richard Bandler, then a young college student studied the work of Fritz Perls and later Virginia Satir and found that he could reproduce their high-level therapy skills to a degree that even surprised him. Bandler seemed to have a natural ability to mimic (model) the language patterns by Virginia and Fritz.

At the University of California at Santa Cruz, Bandler who was well versed in the teachings of patterns in mathematics and computers teamed up with a college professor, John Grinder to help him understand the processes that were at work. Soon Bandler and Grinder, who used what he knew about patterns in linguistics, created a new model for personal growth called NeuroLinguistic Programming.

Bandler and Grinder had set out to model the hypnotic skills of Milton Erickson. They had astounding results. They built a communication model about human "thinking" and "processing" and used that model of how we see images, hear sounds, reproduces smells and tactile experiences in our mind to track and model the structure of subjective experiences.

Sounds very complicated but really it works very simply. Here is an example as used by Paul McKenna - probably the best & most successful hypnotist in the world.

Close your eyes and think of a negative memory. Become involved in the situation as best as you can. Feel the emotions that you felt, see the things you saw and hear the things you heard.

Now take that memory and project it onto a mental screen seeing yourself in the picture. Put a frame around the picture and view it as if it is an old photograph. Next drain all the colour from the picture and shrink the screen to the size of a matchbox.

Have the feelings associated with the picture decreased in any way?

Another good example of NLP involves Anchors. Have you ever smelt a certain perfume or aftershave and had it remind you of a certain person or situation? Gone to a certain place that brings feelings long forgotten flooding back? Or been in any situation that creates emotional responses that would not normally be associated with it? Well if you can answer yes to any of these then you have experienced anchors. Some anchors are associated with positive feelings and some with negative emotions. However, you should be aware that anchors can be consciously installed or already existing ones altered. Here is an example:

Think of a time when you were really happy. If you can't think of one then imagine something that would make you feel really happy. See what you would see, hear what you would hear and feel what you would feel. Really get into the picture and try to experience it as though it were happening now.

Now brighten the colours and make them richer. Increase the volume. Make the picture bigger, brighter, louder. That's it and more and more....

Now press your first finger against your thumb and fully experience your happy feelings. Do this everyday for 2 weeks and you will create an anchor that will instantly recreate these feelings. Whenever you want to feel like that again just press your thumb and first finger together and wham the feelings will come flooding back! Don't believe me? Just try it and see!!! self-hypnosis

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Anonymous said...

Six Steps to Success
Throughout the centuries history tells of men and women with the midas touch, who achieved greatness against what seemed insurmountable odds. To some their successes appeared to be the result of blind luck, to others the reward for hard work, but the truth about the successes of men such as Andrew Carnagie and Henry Ford is much more interesting.
Success is a state of mind to which all people should aspire. Like many others you can unlock te gate to achievement and the fulfilment of yor personal desires. With the six steps outlined below anyone can arrive at a set destination, with the added advantage of renewed self-confidence and secure in the knowledge that every goal is attainable.
Step 1. Desire
The key factor involved in the process of achieving any desire lies in the response of one's mind to the objective. If a complacent attitude is apparent then there will be a lack of enthusiasm leading to failure or only half-success.
If a goal is to be reached determination is needed to carry set plans through to a successful conclusion. This determination must have enough mental 'weight' behind it to propel you forward onto the road of achievement. This mental state can only be instilled by one thing - desire!
As can be easily seen, when we look around us, it is this desire-force that has launched mankind on his frenzied zest for ever-new knowledge and has enabled him to push back the boundaries of science to never dreamed of achievement.
It is this same desire-force that must be used in our business and personal affairs if the success we seek is to materialize. It is not very hard to develop this kind of desire for all you have to do is go after what you really want - its that simple. With this desire you will have all the persistence you need to accomplish your goal. There is a great saying "you never fail until you give up"!
Take heed of what Napoleon Bonaparte said "What we ardently and constantly desire, we always get".
Step 2. Goals
If success is to come your must realise what is expected to materialize. This statement may seem obvious at first but if careful thought is given its meaning takes on deeper significance.
Many people fail to gain satisfactory results from their endeavours because they did not know what they wanted to accomplish in the first place. Your objective must not be hazy or incomplete. Before you reach your goal you must be able to identify how your life will be different when you achieve it. You must know exactly what it is that you want to achieve. How will your life be better/different? How will you feel? What way will you look? What situations will you find yourself in? Will other people in your life be effected and if so how will they react? You need a clear definite picture in your mind of what the attainment of your goal will mean to you.
Step 3. Belief
Belief is the back-up system of desire. It keep the fires of enthusiasm burning and makes us continually strive to get nearer the goal attainment. Faith can truly move mountains; the mountains of fear, inferiority, worry and low self esteem - 'the success killers'!
Once a goal is firmly fixed in mind and our desire-force is hurtling us toward seemingly insurmountable obstacles, the firm belief that we can gain a favourable outcome can spur us on to victory. When the mind has been manipulated to reflect this state, wonderful physical results can ensue, producing symptoms of success in our lives in every area imaginable.
Although many can attest to the power of belief and to the wondrous accomplishments that were achieved through nothing else except faith, it still remains that many individuals find it hard to believe that a positive outcome will be forthcoming when they are faced with momentous opposition. Whether the opposition is mental or physical the fact that nothing seems to be going right and everything seems to be wrong is enough for even the strongest of us to 'throw in the towel'. But it is in these very situations that faith can conquer all. Faith in yourself, what you are doing and belief that that your objective will be reached.
There are some who bemoan "easier said than done". This is exactly the kind of mental attitude that sustains the problems that they are trying to eradicate. If your belief power is not apparent, take hope for it can be acquired.
Each morning and night recite your intentions from a written list of your goals. Voice your belief in your own abilities. Tell yourself that in due course you will be successful. As you go about your daily affairs reflect as often as possible on your goals and affirm that they are yours now. Fool your mind into believing it and you will see your world reflect it!
Step 4. Plan
Having decided upon your goal and being determined to build your faith you need to give your desire-force a 'vehicle' through which it may materialize. This 'vehicle' will take the form of a definite plan of action.
Do you need to acquire certain skills? Do you need to know certain people or be in certain places to help you achieve your goal? Make a plan that will help you get closer to your end objective. Research your desires and get clear on what you need to do. Then do it!
Ensure that your plan is workable and realistic for you. Although your plan should remain flexible so that changes can be made when appropriate only make changes after careful consideration. Trial and error will eventually show the way to a good plan although you should be open to intuition also.
However, I should point out that, it is very likely your goal will materialize in a most unexpected way. The fact that you have set a plan for its accomplishment tends to set things in motion and like a chain reaction (or the butterfly effect) subtle changes made by you may cause dramatic changes elsewhere and your goal may come before your plan is completed.
Step 5. Visualization
Visualization is the art of creating mental movies of your completed goal. This has many beneficial effects upon your consciousness. Without going into the deeper esoteric benefits of using this art let me just say that you are truly designing your life when you use it. It has one other major benefit - it strengthens your desire and persistence because you momentarily experience the thrill of having achieved your goal!
Just form a mental picture of having achieved your goal. See what you will see. Feel how wonderful it will be. See how it effects everyone around you. Hear people congratulate you. When this state is experienced nothing will stop you in your quest for your objective and thus your belief-power will also be reinforced.
Step 6. The Subconscious Mind
It is within the subconscious part of your mind that you hold all th positive and negative beliefs about yourself - your self-image. These beliefs are reflected back to you in the form of attitudes. Therefore it is from the subconscious mind that the thought of failure or success comes.
Attitudes are just mental programs and so is your self-image. They can easily be changed (yes I said 'easily'). Any attitude or belief can be changed by using the formula outlined in this article - by combining affirmations with visualization. Henry Ford used it, as did Ralph Waldo Emerson and even Arnold Swatzeneger. It is reported in some circles that a similar technique was employed by Bill Gates to build his global empire. Andrew Carnegie used it exactly as described to attain and give away multi-millions even though he was an unschooled manual worker when he started it. Carnegie's legacy can still be seen today when you freely borrow a book from any Carnegie library of which there are thousands.
If you use these six steps there is nothing you cannot achieve. Luckily we have the advantage of living in the Twentieth Century with all its new technology and innovations such as hypnosis and subliminal programming. Use these steps in conjunction with your favourite personal development system and you are assured success. personal development

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Anonymous said...

Has the Housing Bubble popped? says "Yes!" A typical subdivision -- the Boca Country Club -- characterizes the area, and the problem. Read more ....

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