I really don’t like blogging at night. I have much better things to be doing. But occasionally I find things that jump out:
David Rosebaum writes an article about the recommendations of a bipartisan tax reform committee with surprising conclusions:
About a consumption/sales tax:
As for a national sales tax, the idea was dropped after a commission member, Edward P. Lazear, a labor economist at Stanford University and the Hoover Institution, a public policy research center, reported that the sales tax would have to be as high as 87 percent on most goods and services if items like medicine, education, food and clothing were not taxed.
About the health care deduction:
Mr. Muris said he did not know how much revenue his plan would raise. The Congressional Budget Office calculated this year that a limit of $3,720 in tax-exempt premiums for an individual and $8,640 for a family policy would raise $706 billion over 10 years.
About the mortgage deduction:
A third idea was to limit the deduction to 15 percent or 25 percent of a taxpayer’s mortgage interest payments. The wealthiest taxpayers can now deduct 35 percent of the interest. The panel members said they had not calculated how much revenue any of these proposals would generate. But the Congressional Budget Office reported this year that a $500,000 ceiling on the mortgage principal for which interest can be deducted would raise $48 billion over 10 years.
Deductions are a significant cost to the government budget, and you really have to consider the unintended consequences here. Example: is there a relationship between rising costs in these industries and government tax incentives? In my opinion, yes.