Treasury Dept. proposes tax-free savings accounts (Stealth attack on income taxes? -- my title)

Detroit News ^ | Feb. 1, 2003 | Peter G. Gosselin

[FairOpinion]

Treasury officials portrayed the proposal as a streamlining move, but a wide range of analysts said it could represent a significant retreat from a central tenet of the nation's tax system: that the rich should pay a greater share of their income in taxes than those who make less.

But even some conservative analysts said that, together with President Bush's recent call for a dividend tax cut and the administration's already-enacted income tax rate cuts, the new proposal would undermine the progressiveness of the tax system by placing a substantial share of the money made on savings and investment -- the lion's share of which goes to the top few million households -- off-limits to taxation.

While the accounts might prove a boon for many individuals, a variety of analysts warn they could produce a series of perverse consequences for savings and especially for government finances.

Because of the generous tax breaks in the new accounts, it wouldn't make sense for most people to save or invest anywhere else. As a result, more and more money would pour into them, eventually shielding much, if not all, of the nation's savings and investment income from taxation. Because most of that income is held by the top tier of households, most benefits of the breaks would go the richest Americans, leaving the rest to make up the lost tax revenue.

The president "wants to poison the income tax system so it will collapse under its own weight," said Leonard Burman, the Treasury deputy assistant secretary for tax analysis in the Clinton administration. The proposed tax-free savings accounts would "dissolve the income tax piece-by-piece."

[FairOpinion]

"The president "wants to poison the income tax system so it will collapse under its own weight," "

---- Well, I find this encouraging: allowing more people to keep their own money.

[Sparta]

But how does Bush reconcile this with him giving the IRS more money

[Bernard]

So let me get this straight - rich people have more money than poor people do, so any change to the IRC is unfair because poor people will have less money than rich people. Is that how it works? I'm so glad reporters understand economics.

[coloradan]

He must want to give the IRS more money so they can crack down even harder on the poor, who pay most of the taxes anyway. /liberal

[FairOpinion]

But how does Bush reconcile this with him giving the IRS more money
----
Well, I don't agree with that. But maybe soon most income will be sheltered, so the IRS won't have anything to enforce. As I said in the other thread, Bush is smarter, than people give him credit for.

[goodnesswins]

"But even some conservative analysts said that, together with President Bush's recent call for a dividend tax cut and the administration's already-enacted income tax rate cuts, the new proposal would undermine the progressiveness of the tax system by placing a substantial share of the money made on savings and investment -- the lion's share of which goes to the top few million households -- off-limits to taxation."

What's one of the scariest things for a liberal? A loss of revenue off YOUR HARD EARNED MONEY. They do not understand SIMPLE economics (or so they act), but they DO understand taxation and its way of killing peoples desires to work hard, only to have 30-50% taken. And, those "top few million households" probably have a hand in producing MANY of the jobs in this nation, and pay the most in TAXES, too.

[jdege]

The president "wants to poison the income tax system so it will collapse under its own weight,"

Damned straight.

[Libertarianize the GOP]

http://www.freerepublic.com/perl/bump-list

[philman_36]

The president "wants to poison the income tax system so it will collapse under its own weight," said Leonard Burman, the Treasury deputy assistant secretary for tax analysis in the Clinton administration. The proposed tax-free savings accounts would "dissolve the income tax piece-by-piece."
Give that fat a**ed income tax another, bigger spoonful of that poisonous disolver, PDQ!