Milton Freidman’s caviler world-view regarding tax-cuts depicted in the following quote: “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible.”, motivated the Neo-conservatives to champion many mindless tax-cuts. Just as counterproductive for America, the Neo-cons have obstructed the removal of mindless tax provisions already on the books. This situation provides meaningful low-hanging fruit for generating federal tax revenue to avert the “Fiscal Cliff” without decimating America’s historical social justice values.
Some examples of low-hanging fruit that primarily benefit the 1% are:
- Tax-deferral of tax on foreign income
- “Carried Interest” that enable income from labor to be converted into capital gains
- The Bush reduced rates on dividends and capital gains
- Reduced rates on dividends and capital gains on foreign investments
- Reduced rates on speculation
These are some expensive inequities, which are simple to correct during the “fiscal cliff” triage stage of tax code reformation. In addition, Warren Buffett in his recent New York Times op-ed: “A Minimum Tax for the Wealthy” suggests a simple revision in upper-end tax rates, namely, a minimum tax of 30 percent of taxable income between $1 million and $10 million, and 35 percent on amounts above that. In Buffett’s words: “… to keep the ultrarich paying rates well below those incurred by people with income just a tiny fraction of ours.”
To keep first thing first, suggestions for the ultimate stage of tax code redesign should be delayed until the triage stage is completed.
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Posted December 3, 2012 at 11:37 am, in Free Speech Zone