Tax Code Reform is Necessary

In my effort to pass the test as a Tax Preparer, I had an epiphany.

The complexity of the tax code far exceeds the capacity of many people to comply with it.

And then they are angry at it because they think someone with more capacity is getting more out of it than they are.  And you know what, they are correct in that.  And you know who gets the most advantage out of the Tax Code, Property Developers and Hedge Fund employees.  The latter is well known because the Democrats campaigned on ending the carried interest exclusion, but Donald Trump likely hasn't paid much income tax on a lot of income because it is sheltered by the depreciation of his property.

That is why his desire to end the Estate Tax is outrageous.  When property passes to an heir, it is marked up to market value for tax purposes and can be depreciated all over again.  This is the ultimate legal game for avoiding taxes and Trump pursues it to the nth degree.  He doesn't pay much in taxes and he doesn't want his children to pay much in taxes on billions of $ of wealth.

So either the Estate Tax must remain to avoid this or something that I cannot figure out a fair way to do needs to be done about property depreciation for things that appreciate in value and are not owned by a corporation, but rather by partnerships.

Partnerships are also the big winner in the Kansas state tax reduction that has ruined their finances so we know this is a favorite trick of the GOP to reward their campaign supporters.

I am not optimistic about my preferred action coming to fruition in the GOP led Congress.

Finally, a comprehensive plan to address income inequality and provide hope

This is from an article by Arthur C. Brooks of the American Enterprise Institute, which Google tells me is a conservative think tank.

"This requires a generational strategy to build an education system based on innovation, school choice and an emphasis on vocational training.  It means rewriting tax and regulatory law to stop discouraging domestic investment and squelching job creation, while also attacking corporate cronyism that gives special treatment to wealthy and entrenched interests.  It demands authentic compassion for people on the periphery of society."

I would add to that comprehensive tax reform that lowers our corporate tax rate to 15%, but does away with other tax expenditures that reduce the taxes below that rate for firms that benefit from such largesse.  The reason I support that is multi-national companies can locate jobs anywhere.  That is the level many other countries use to tax corporations.  If we make taxes neutral, the only influences on plant location will be costs, demand distribution and transportation costs from location to demand.  Taxes will not be a consideration.

Wow!!! Thomas Friedman Creates a Radical Program From the Left and Right

I understand each part, but wonder what political candidate, today or in the future, could pull together the voting public segments to run on it, and then get the Congress to pass it.

Link to Friedman Column

And the following column on how even with health insurance, people can have problems paying for their health care.  My initial reaction was sympathy for them as I know a $6,000 individual max-out-pocket or $10,000 family max-out-of-pocket is unaffordable for someone making $40,000 a year unless they cut back on something else in their budget.  But then I thought about the fact that they would have probably been dead 60 years ago with the same chronic illness.  Surely, having access to some health insurance that is means tested is better than having no health insurance.  That is what ObamaCare has given us and that is what Heritage Foundation/RomneyCare/ObamaCare was designed to do.

And what can society afford to pay for this care, collectively we are paying 20% of GDP for health care, and someone in this economy is earning that 20% of GDP.  While I would like a single payer plan, the transition to it is going to be disruptive to a certain % of people and that will create a different type of financial chaos within certain families.  And how do we make a single payer plan affordable?  It cannot be free and therefore, how does it help the people in this article?

Better minds than I, who understand health care, should be writing about all this.

Anyway, this column is worth pursuing.

Link to article