Posted on 11/08/2005 5:40:35 PM PST by Libloather
Officials hope tax 'reform' is now dead
By: RICHARD ROTH 11/08/2005
HILLSDALE-The President's Advisory Panel on Federal Tax Reform, which was established in January 2005 to recommend options that would make the tax code simpler, fairer and more conducive to economic growth, issued its final report last week.
Among the panels recommendations are a reduction in the deduction for mortgage interest, and the elimination of deductions for state and local taxes.
But none of the area's representatives in Washington expect those recommendations to result in legislation. While they did not specifically address the mortgage interest deduction, both senators and both congressmen from this region said they were completely opposed to any change in the deduction for state and local taxes.
"We haven't seen any momentum to adopt any of those measures," said Melissa Carlson, press spokeswoman for Congressman John Sweeney (R-20th). "Congressman Sweeney would not be supportive of measures that do not allow New Yorkers to deduct local taxes."
Senators Chuck Schumer and Hillary Clinton and Congressman Mike McNulty (21st), all Democrats, were even more direct in opposing any action on the panel's recommendations.
"The deduction for state and local tax has existed since the federal income tax was first implemented in 1913," Mr. McNulty said in a written statement. "You can be assured that I will work alongside my New York colleagues in the House and our two Senators to block implementation of this proposal."
Senator Schumer said enacting the changes would drive more businesses away from the state and create a budget crisis for local governments "the likes of which we've never seen." New Yorkers saved over $24 billion through the state and local tax deduction in 2003, according to figures provided by Congressman McNulty's office.
"Nothing could stifle growth and slam hardworking families in New York and around the country more than the repeal of these deductions," said Mr. Schumer. "Thousands of dollars in added taxation will create a giant sucking sound as the best and brightest workers, and the most productive companies, face incentives to move to lower-tax jurisdictions."
Mr. McNulty said New Yorkers already endure high taxes and real estate costs relative to most other states, and he said the state and local tax deduction levels the playing field. "It is a crucial point of balance and fairness that must not be eliminated," said Mr. McNulty.
New York sent the federal government $47 billion more in taxes than the state received in federal spending in fiscal year 2000, according to an analysis by The Public Policy Institute.
Senator Clinton said it was important that any effort towards tax reform maintain some basic elements of progressivity, fairness, and fiscal responsibility.
"Given that the commission's proposal eliminates the state and local tax deduction, significantly curbs the mortgage interest deduction and assumes revenue losses identical to the president's tax cut agenda, it is not clear if these conditions have been met," said Senator Clinton. "Simply put, tax reform should not come at the expense of benefits to the middle class or fiscal responsibility."
Under current law, taxpayers who itemize their deductions may deduct interest up to $1.1 million of mortgage debt. Under the panel's recommendations, all taxpayers would be eligible for a home credit equal to 15% of the mortgage interest paid; and the mortgage would be limited to the average regional price of housing, up to a maximum of $412,000. Critics of the current system say it artificially drives up housing prices, because the tax deduction allows buyers to handle a much larger debt load.
The last major tax reform bill was passed in 1986, during the Reagan Administration. The advisory panel said there have been nearly 15,000 changes since then, an average that amounts to nearly two changes a day, and that the current tax system is unacceptable.
"In retrospect, it is clear that frequent changes to the tax code, no matter how well-intentioned, ultimately undermine the integrity of the code in real and significant ways," says the panel's cover letter submitting the report to Treasury Secretary John W. Snow.
On the local level, County Board of Supervisors Chairman Gerry Simons said he had not yet seen the panel's report. "I hadn't heard anything about it," said Mr. Simons, "but I most certainly would be very upset if this were to come to fruition."
Keep your "benefits", Hillary. I earn my own way. I don't want to pay for other people's benefits. I'll buy my own, thank you very much.
Schumer you POS idiot! The overall rate would go DOWN...Plus compliant and paperwork costs would go DOWN...therefore saving taxpayers MONEY - but you filthy Rats would spend the extra revenues anyway so the argument is MOOT!!
I'm so mad at this - The Founders fought a war over taxes that were far less than they are today.
Purpose. The purpose of the Advisory Panel shall be to submit to the Secretary of the Treasury in accordance with this order a report with revenue neutral policy options for reforming the Federal Internal Revenue Code. These options should:
(a) simplify Federal tax laws to reduce the costs and administrative burdens of compliance with such laws;
(b) share the burdens and benefits of the Federal tax structure in an appropriately progressive manner while recognizing the importance of homeownership and charity in American society; and
(c) promote long-run economic growth and job creation, and better encourage work effort, saving, and investment, so as to strengthen the competitiveness of the United States in the global marketplace.
The tax panel failed to issue a report that fulfilled (a), (b) and (c)
The FairTax fulfills all three... in spades
Benefits of the FairTax
Rep. Bill Archer, Chairman, House Ways and Means Committee:
"A recent survey was done, in Europe and Japan, of the major corporations and I was astounded at the results. They were asked, 'If the US abolished its income tax and went to a sales tax, would that have any impact on your decisions?' Eighty percent of the corporations said they would build their factories in the United States of America. Twenty percent said they would move their international headquarters to the United States of America."
That's the short list. For more information see fairtax.org or search: "national sales tax" OR "national retail sales tax"
What a total waste of tax payer's money.
If anyone would like to be added to this ping list let me know.
John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.
H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.Refer for additional information:
Neither Chuckie, Hillary, or any other statist (read marxist) SOB cares one whit about ANY of that! ALL they are concerned with is their ability to manipulate the great unwashed (us) via the tax code!
"it's illegal to say to a voter 'here's $100, vote for me.'
So what do the politicians do? They offer the $100 in the form of health care, social security, unemployment insurance,food stamps,tobacco subsidies,grain payments,NEA payments,and jobs programs".
--Don Farrar
how true...
"Congressman Sweeney would not be supportive of measures that do not allow New Yorkers to deduct local taxes."
<*sigh*>
They. just. don't. get. it.
And the sad thing is, they're not even TRYING to get it.
But actually, Boortz is right -- the REAL problem is that politicians know that if real reform happens, then they'll lose a lot of their vote-buying power. The tax code is a large part of that, so many of them will resist reform, opting for "reforms" that are nothing more than Band-Aids which only make the tax code even more convoluted and don't even address the problems.
"'We haven't seen any momentum to adopt any of those measures,' said Melissa Carlson, press spokeswoman for Congressman John Sweeney (R-20th)."
I think that is the bottom line. There would not seem to be enough economic or other benefits to garner the political pressure needed to overcome DC's enormous enertia and natural resistance to tax reform.
It is a shame and a pity that this panel wasted almost 10 months of time in arriving at an end result that is going to be quickly forgotten. It is also ironic that the same panel which wrote an interim report back in April titled "America Needs a Better Tax System" seemed to have developed amnesia since then relative to how the American people feel about the current system.
As indicated, their interim report was titled "America Needs a Better Tax System".
Their final report should be titled "But Don't look to us to provide it".
A cogent observation, indeed.
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