Tax Panel to Release Report Tuesday

October 31, 2005

Reuters reports that President Bush’s tax panel will release its recommendations tommorrow (brought to my attention by MyDD):

[from Reuters:] The panel has agreed to back lower tax rates for all taxpayers, coupled
with the elimination of the deduction for state and local tax payments,
and tighter deduction limits for mortgage interest and
employee-sponsored health care costs.

Slate’s Daniel Gross responds in a piece titled "Tax ’em Till They Turn Red:"

Who has the most to lose if the mortgage deduction is capped at
$313,000, and if you can no longer deduct local taxes from your taxable
federal income? People who live in places where (a) real estate is
expensive; (b) states and/or cities tax income; and (c) property taxes
are high, to support local schools and services. In other words, people
who live in California, Seattle, the entire Atlantic seaboard from
Maryland up to Maine, and well-off suburbs of Chicago.

Scott Shields has some thoughts and notes a Democratic alternative:

The proposals are likely to be incredibly unpopular, so this should be
an easy win for the Democrats who are expected to oppose it from the
start. But we all know that, despite the fact that there will be
bipartisan opposition to the plan, the squawking heads will all be
squawking about the fact that at least Bush deserves credit for at
least pitching something.
(Nevermind the fact that that’s like giving someone credit for
proposing to kill all illegal immigrants just because they’re putting
forth a proposal on illegal immigration.) This time, there most
certainly is a Democratic plan for tax simplification.

Cranky George says:

My problem with the panel is that it isn’t headed up by the finest
economists or accountants that we have in this country. Instead we have
two of the politicians who were former members of the “club” that
played with that Tax Code. So it is no wonder that “only a little
streamlining” is in order! This just means that, after it is all said
and done, there will be a somewhat blanker page for the politicians to
start manipulating the code all over again!

Economic Trends:

While I certainly concur with ridding the nation of the AMT, I do not
agree with the panel’s recommendations on how to pay for its abolition.
The panel revealed (leaked) this week that it would recommend cutting
back on the deductability of home mortgage interest.

Economist’s View has links to several other comments and adds:

Echoes of Social Security. Here we go again.

ARGMAX:

Considering the backward direction of the Bush [administration’s] tax
policy over the last five years, the proposals from the [president’s]
tax panel are something of a relief. The last five years of tax changes
have led to declining revenues, massive deficits, and an increasingly
unfair tax code. The [panel’s] recommendations are at least neutral on
those major choices.

I haven’t been able to find much real support for the expected proposals, though this issue seems to be operating a bit under the radar at this point. We’ll see if that changes. I’m sure TaxProf blog will have more to say on the subject in the coming days as well.

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