Tax Expenditures Can’t Exist [Just Lower the Tax Rates.]

ATR ^ | 2011-04-26 | Ben Wilterdink

[92nina]

In most plans to reduce the deficit “tax expenditures” is a phrase that comes up often. We have to “reduce tax expenditures” or “get rid of spending in the tax code”. This is a popular way politicians try to sell their plans to eliminate credits and deductions that families or businesses count on when filing tax returns. The idea of reducing tax expenditures is central to the plans proposed by President Obama, the Senate Gang of Six, and the Simpson-Bowles debt commission. The popularity of this phrase and idea is nothing short of astounding, considering the fact that, in the real world, “tax expenditures” do not exist.

Furthermore, they can’t exist. The tax code is set-up to collect tax revenue from people and businesses. Eliminating the so-called tax expenditures alone is (and must be seen as) a tax increase. If the concept of tax expenditures is given serious intellectual credit the logical implication is that all money belongs to the government, and allowing someone to keep any portion of their personal income should be considered a government expenditure. A credit or deduction is not spending in any way. The Treasury never wrote anyone a check (with the exception of refundable tax credits, which are a special case) and it is not a federal outlay. When someone deducts something from their tax liability, less of their money goes to the government. The key here, that should be obvious, is that they have just kept more of their own money. This is true for deductions and to a much greater extent tax credits (as these are matched dollar for dollar in a decreased tax liability). Again, this should be elementary for everyone to understand: keeping more of one’s own money does not mean the government has spent anything...

Read more: http://www.atr.org/tax-expenditures-cant-exist-a6100#ixzz1KkVLltMh

[92nina]

Our friend from Chicago, Mr. Obama, and his lackeys continue their campaign of deception.

Take this article and others I found to the fight to the Libs on their own turf; put the Left on the defensive at at Digg and at Reddit and in Delicious and Stumbleupon

[ex-snook]

It’s not the tax rate that matters, it’s what is actually paid.

[waynesa98]

actually both are important, the when rates get into the 20% range, individuals begin to redeploy assets away from productive investments to tax avoidance strategies. That’s the basic reason the fed gov has never had tax revenues greater then 20%. It also tells you where the sweet spot is on the laffer curve. In other words, flatten the tax code, while dumping all the carve outs, and you’ll increase tax revenues as well as income.