Thursday, September 28, 2017

Neither tax reform nor a plan

I often feel impelled to quote that famous line about how the Holy Roman Empire was neither holy, Roman, nor an empire. The supposed tax reform plan that the "Big Six" have just released gets two-thirds of the way there. It is about taxes, but it's not reform - just massive, unfunded tax cuts - and it's not a plan - just rough ideas, sketched in crayon, that a Tax I law student could have done (better) in 24 hours or less.

It's really an insult to have to focus on so sketchy and poorly conceived an issuance.  I have better things to do with my time, and there are more thoughtful people around, on the right as well as the left, with whom it would be more fruitful to interact intellectually.

Just two quick things, as I'm saving international for a follow-up post:

--Why raise the bottom rate from 10% to 12%? I can see no good reason for this apart from malicious class warfare.  It can't be about revenue, given everything else in the plan.

--The 25% rate for business income of pass-throughs may take the prize as the worst new tax policy idea of the past thirty years. They say they'll have rules to prevent conversion of "personal income" into business income - but that just states (a part of) the problem, rather than offering any suggestion that it could be handled with any success or without massive and idiotic complexity. And why should "business income" get a lower tax rate than "personal income" - such as wages - anyway? Do they hate employment, as opposed to being self-employed? If so, why not simply fine people who take jobs working for someone else? That is essentially what they are proposing to do.

1 comment:

DM Hasen said...

Also, as others have pointed out, a back-door attack on the home mortgage interest deduction for lower-income homeowners, who now effectively have to choose between the personal exemption and the interest deduction--because the personal exemption in rough measure has been moved to the standard deduction, which you cannot have if you itemize.