READER MICHAEL MILLER offers another suggestion to Speaker Boehner for increasing revenue:
Want to change the direction of the debate? Let’s talk about actually taxing the wealthy. You want to see Dem’s scream and argue about that. Tax people on their assets, not their income. Pelosi’s wealthy on income, nope.
The conversation MUST change. There are dozens of potential revenue sources within the wealthy that would easily triple the income to the US over penalizing hard workers. And then, we’d see the true colors of the Dems, the Streisands, Spielbergs, the Soros.
Hundreds of billions can be generated, by taxing a very small portion of muni bond income. Yes, other items can be looked at, tax breaks, but they are miniscule, to the total WEALTH, (NOT INCOME) that is out there. And it wouldn’t change their desirability since even after a SMALL tax, it beats everything out there. Guess who owns muni’s? Feinstein, Spielberg…
In essence, this is the only way out of the punitive tax brackets we find ourselves in. And even if it makes little economic sense, just hearing these jerks whine about a tax on THEM, just for a bit, would be hilarious.
Meanwhile, Prof. Stephen Clark writes:
Why not call Obama and Reid’s bluff.
Quid: Bush era tax rates expire for everyone and a one-time only extension of the debt ceiling limit to get us into the New Year and a new Congress.
Quo: An agreement by all parties to a vastly simplified tax system that is flatter and has no exemptions other than that for dependents, and no deductions – none for anyone or anything.
I thought about including spending cuts; but no, perhaps not, in keeping with the KISS principle. If the people want their government to spend money in a manner that would make a drunken sailor blush, then they should have to pay for it – every single one of them. It is not a coincidence that as the tax system has become more progressive we’ve become such public spendthrifts.
Only when people see that the revenue obtained doesn’t come close to covering the government’s outlays will anyone begin to believe that the cupboard is bare. Does it hurt the economy? Perhaps, but therein lies a lesson too.
I’m all for education.
UPDATE: Andrew Hofer emails:
OTAL “tax expenditure” on exempting muncipal bond interest is $200 Billion. Reader Michael Miller is off.
Second, you have to think about who really pays. This exemption is effectively a subsidy from the federal government to states and localities. Muni bond rates are lower (in the long run), by almost as much as the exemption tax savings. So you remove the exemption and the bond yields increase, raising the interest costs to states and municipalities over time. Removing it is a transfer back from high-tax (generally blue) states to the federal government. That, of course, may be a reason to do it….but in the entire tax system there really aren’t a lot of savings.
See this graphic, which was compiled by Standish.
Well, I don’t think there are enough potential revenues out there to close the deficit, which is part of the point. But spreading the pain is also part of the point.