The American Spectator : The Spectacle Blog : Deficit Panel and Taxes

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The Wall Street Journal reports today President Obama's fiscal panel is considering a proposal that would scale back tax deductions and credits for mortgage interest, health insurance, and children.

On the surface, it would make sense to eliminate these policies. The mortgage interest deduction is more or less a subsidy to the real estate industry. It's unfair to those who cannot afford a down payment to purchase property and was a contributing factor to the housing bubble. The child tax credit adds complexity to the tax code. The health insurance deduction perpetuates the employer-based health care system, driving up health spending while limiting choice and portability.

The problem is, none of these changes are being proposed as part of broader reforms to simplify the tax code and improve our health care system. Instead, they're merely being looked at as a means of raising revenue. Americans for Tax Reform estimates that if not offset, this would translate into an effective tax increase of $2.4 trillion over five years.

Politically, none of these proposals would have a chance of going anywhere in Congress. This is especially true of the mortgage interest deduction, which is extremely popular and the subject of intense lobbying efforts by the real estate industry. With the housing market still weak, it's unlikely that there would be much of a constituency for ending this subsidy.

View all comments (4) | Leave a comment

Lazy Jack| 10.25.10 @ 3:37PM

Please watch your nomenclature. It is not a tax increase, it is a cost savings. Remember, the product of your labor belongs to the government. Any that they let you keep is an expense. Therefore, by eliminating the deductions, they are just reducing the largesse they lavish on you, the ungrateful masses.

For simplicity:

Tax Increase=Cost savings
Tax Cut=Theft by the ungrateful

Lazy Jack

www.thanksforthelaughs.wordpress.com

John - TMF| 10.25.10 @ 3:49PM

Well now let us see how we can do even more to destroy the Bourgeoisie? Ah yes! We will remove the biggest reason to go into debt for 30 years!!! That will keep all of those nasty middle class people from having a chance to own property.

Take away the mortgage interest deduction (mind you it isn't a subsidy, it is merely allowing to keep your own money...) and there is almost no reason other than pride, to own.

When the Renter Class increases, government and the very wealthy control all real property. When that happens, Fascism becomes a permanent feature of the socio-economic order.

Once we all work for the State, and the State chooses all of the winners... We are finished.

Humpty Dumpty II anyone?

r/The Mighty Fahvaag

Chris| 10.25.10 @ 7:45PM

Well, you also forgot that we don't want them to be able to afford kids either. One reason most of them are in so much debt on their homes is that they were running to either better public or private schools.

One reason the middle and lower-middles classes haven't been able to save isn't because they were frittering their money away. It's because they've been trying to get their kids a good education and a better life. But no, let's kick them again. I guess we're still kicking some after exporting decent paying jobs and importing workers to drive down wages.

Gene | 10.26.10 @ 6:20PM

if things are allowed to continue as they are with pensions out of sync and govt. subisidies and bailouts there will be no option other than to tax just like in europe with out the cavaier Santa Maria Homes For Sale