Bush expected to delay major tax overhaul

MSNBC ^ | 12/28/2004 | Jonathan Weisman and Jeffrey H. Birnbaum

[Your Nightmare]

Wholesale changes to the tax code that just weeks ago were identified as a Bush administration goal by the end of 2005 are being pushed back for at least another year.

White House economists, Republican tax aides in Congress and outside economic advisers say key White House officials have determined that they have their hands full with Bush's pledge to overhaul Social Security and a budget plan that will demand politically painful cuts to non-defense spending.

[Your Nightmare]

Looks like fundamental reform isn't going to happen for a while and they are going to try for the stealth consumption tax by greatly expanding tax free savings accounts.

[Molly Pitcher]

If true, Dang!

[wagglebee]

This sucks!

[mwl1]

My vote: get judges confirmed in 2005, make tax cuts permanent in 2005-06, enact tort and medical malpractice reform prior to the 2006 elections, and save social security reform for 2007-08 to cap the Bush presidency and innoculate GOP incumbents in 2006 midterms.

[Your Nightmare]

Actually, allowing unrestricted (except amount) tax-free savings accounts would be a very fundamental change in tax policy, but most lay people wouldn't recognize as such. As we are allowed to save more tax free, the tax system becomes more of a consumption tax than an income tax. This is why I think the Bush admin is going this route. They can change things pretty drastically without looking like they are.

[The Raven]

Could be one of those puposeful "downplays" to get SS reform without distractions

[stopem]

Great, so get us all excited about a tax reform and now they say all that will happen is a change, reading the proposed changes will not make things better for a majority of us.

Taxing health insurance as income? Thats not a good thing.

Anytime I hear the word "Tax" I cringe.......

[Semper Vigilantis]

Dare I hope that "a budget plan that will demand politically painful cuts to non-defense spending" means cutting funding to things like the UN, NPR, abortions, studies on how much methane a cow produces and it's effect on the ozone, cable TV in federal prisons, buying votes through welfare programs...?

[Your Nightmare]

Dare I hope that "a budget plan that will demand politically painful cuts to non-defense spending" means cutting funding to things like the UN, NPR, abortions, studies on how much methane a cow produces and it's effect on the ozone, cable TV in federal prisons, buying votes through welfare programs...?

Yup, now that the election's over, how about repealing "No Child Left Behind" and the Medicare drug plan?

[patriot_wes]

Looks like they heard from the foreign owned federal reserve! Changing the money tap to the world bank isn't going to happen.

[Bloody Sam Roberts]

Actually, allowing unrestricted...tax-free savings accounts would be a very fundamental change in tax policy...As we are allowed to save more tax free, the tax system becomes more of a consumption tax than an income tax.

Works for me. Bring it on.

[petercooper]

Taxes on capital gains should be eliminated.

[Your Nightmare]

Taxes on capital gains should be eliminated.

As long as you keep investing (saving) them they will be. When you take them out of savings (to use for consumption) they would be taxed.

Economically, income = savings + consumption. So if you tax income - savings you are really taxing consumption.

[Atlas Sneezed]

Taxing health insurance as income? Thats not a good thing.

---

On the contrary. It would cure the "health care crisis" overnight.

Now, we have overinsured folks overconsuming health care. The whole employer medical insurance pattern began as a way for unions to avoid wage controls under FDR.

Those who have $1500/month health insurance might actually prefer a cheaper catastrophic plan to avoid the $500 additional tax bill. Or maybe just getting paid for their work, and allowed the freedom to buy insurance on the open market, as with car insurance and fire insurance.

Just as the mortgage deduction has inflated the cost of housing, the medical insurance exclusion has inflated the cost of medical care.

[stopem]

Hmm interesting concept. First time I am hearing that the mortgage interest deduction caused home prices to be inflated.

The "Open market" insurance is extremely high in comparison to Group health insurance so given a choice most people will opt for group health insurance, the cost of health insurance is so high now even on group insurance most cant afford it.

So to tax the already high premiums is ridiculous.

[Atlas Sneezed]

So to tax the already high premiums is ridiculous.

---

If there is an income tax, why shouldn't compensation in the form of medical premiums be taxed?

[wagglebee]

This sounds like a bunch of BS to me!

Bush spends all of this time talking about tax cuts and simplification. Now he is delaying that for at least a year (which can have a nasty habit of becoming never) AND proposing what looks like a tax increase.

I think Bush needs to go have a chat with his father about the effects of something like this.

[wagglebee]

I wish oneday one of these politicians would "stumble upon" the idea of a real spending cut (as opposed to a "cap" on planned spending increases which is what normally passes as a cut). It's not that hard to do and most people have had to do it in their own lives at some point or another.

[cyncooper]

Please beware of media mischief. One of the few named sources in the article says this:

Claire Buchan, a White House spokeswoman, said an overhaul of the tax code remains a Bush priority, noting the White House economic conference this month devoted a panel to tax simplification

This is designed to get people disgruntled and how dismaying to see how easy that is to do.

President Bush says what he means and means what he says.

I advise all to read the whole article. It is the Bush administration sticking to their plan and "outsiders" saying it can't be done.

[cyncooper]

Read the article.