Comments on: Tax deductions are popular, but penalties may work better http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/ Fri, 05 Dec 2014 11:27:18 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: RMEickhoff http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8725 Mon, 07 Nov 2011 18:51:36 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8725 I always find these discussions interesting when talking about percentage of income for the wealthy versus the middle or lower class. No question that the middle and lower classes spend a higher percentage of their income on goods and services (which is why flat taxes are regressive and hurt the middle class and poor). There is another fact and reality that seems to be often missed…. weathly people spend more overall dollars than middle class or the poor. So your top 10% of wage earners will pump a smaller percentage of their income but a larger overall dollar amount into the economy. Does that mean they deserve a greater tax break? No, but I don’t know that penalizing them makes sense either.

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By: rulesrlr http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8693 Wed, 02 Nov 2011 12:53:14 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8693 Chairsandtables writes: “Get rid of tax deductions like mortgage interest — its not fair to those who responsibly live within their means and rent their homes.” While your comments were thoughtful and inciteful, I wonder if you have considered the economics of renting. While the renter does not deduct interest, the property owner does deduct the interest and is able to keep rent prices down because of that tax break. There are also ripple effects of eliminating the tax break of interest. Many of those who purchased a house and calculated their budgets based on the interest deduction would ultimately default if that deduction were taken away. Certainly home prices would fall which would affect the economy in many other ways. You note that responsible parents consider their children a blessing as if responsible children don’t consider their aging parents a blessing. I suspect the purpose of the tax break for children is to take into account the fact that the income to the family feeds and houses more people. Certainly responsible parents want to take care of their children but their responsible behavior doesn’t increase the paycheck to cover the extra clothes and food.

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By: hereiam2005 http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8668 Sun, 30 Oct 2011 13:27:56 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8668 There are different kind of tax expenditures, this article make no different among them, which oversimplify things.
The first kind is the kind of tax expenditures simply for the sake of taxing, that is, (to hope) for more efficient tax collection, thus more tax revenue. No direct connection can be proven, and indeed there is nothing prohibits corporations to just keep the profit for themselves and still evading tax. In this case, the stick will be the better option.
The second kind, however, is for an entirely different purpose. The US economy, however you put it, is consumer driven – 70% of it is consumer based. In the crisis, however, the consumers simply have no cash left to spend. The unemployed, are obviously cash strapped. Even more significant, the employed had seen their salary and bonuses reduced, higher credit cost, while still have to cope with mortgage payment, utilities and rising healthcare premium. Indeed, US saving rate have been reduced to zero for sometime now. In short, consumers have no money to spend anymore.
Less spending – reduced economy. Reduced economy – lay offs, bankruptcy, reduced credit. Lay offs, bankruptcy, reduced credit – even less spending. This is stagflation – and it is destructive. Therefore the second kind of tax break and tax credit is necessary, IN TIME OF CRISIS, to spur spending. It is especially effective when target consumer groups that spend MOST or a LARGE percentage of their income on consumption versus investment or saving – which is low and middle income class. The higher the income, the lower the percentage of that will be spent for consumption versus investment. That is why tax break on high income group is not effective.
This has NOTHING to do with welfare or class warfare. It is simply a system that encourage spending to fight stagflation.

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By: Yowser http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8665 Fri, 28 Oct 2011 17:34:51 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8665 Please forget about all this social engineering. Just set up the three brackets envisioned by the committee, eliminate the carrots and sticks, and let the people do what they want.

As to Grinder, I note that you have written a rarely seen defense of tobacco. You must know more about that poisonous weed than the Surgeon Generals, American Cancer Society, American Heart Association and countless others.

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By: txgadfly http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8664 Fri, 28 Oct 2011 16:18:27 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8664 The bottom line is that the biggest tax penalties are a result of being born in the USA to parents with incomes below the 90th percentile.

Be born rich or born with foreign citizenship and you will be ok. If the US Government can get a good grip on your neck, you are doomed.

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By: grinder http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8663 Fri, 28 Oct 2011 14:10:34 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8663 Flat tax on all income from whatever source above the poverty level for the area the taxpayer lives in. And, FWIW, there is no discrete, empirical scientific evidence that tobacco use causes anything — all the studies are statistical and include the phrase, “in susceptible persons.” Tobacco use/smoke may aggravate existing conditions in some people (such as asthmatics) but not cause them. Lung cancer was virtually unknown and did not become a concern until the 50s. Most doctors then blamed vehicle exhaust. And it’s interesting that the rate of lung cancers has lessened after the implementation of catalytic converters and the banning of cheap diesel use in our trucks — except for major ocean ports where their neighbors are still exposed to rotgut diesel fumes. All this fuming over tobacco use seems to be (1) government disinformation to protect auto makers and (2) popular distaste for the odor of cigarette smoke.

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By: chairsandtables http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8660 Fri, 28 Oct 2011 12:35:24 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8660 Eliminating unfair tax incentives — good. But penalize people for not buying homes, not saving for retirement, not having children? Ridiculous. Some tax breaks are meant to give a break to already financially stressed people, not necessarily encourage a particular behavior. These tax breaks cannot be simply reversed into tax penalties. Get rid of tax deductions like mortgage interest — its not fair to those who responsibly live within their means and rent their homes. Get rid of the tax deduction for each dependent child, but leave it for dependent aging family members. Responsible parents consider their children a blessing, not a way to get a better tax break. They will make the necessary self-sacrifices to raise them.

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By: Oilfieldtrash http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8659 Fri, 28 Oct 2011 11:35:56 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8659 Nothing reeks of government control more than the control of United States citizens via the tax code. This is another compelling argument for a flat tax with few if any deductions. Free society, ha!

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By: gregnazvanov http://blogs.reuters.com/reuters-wealth/2011/10/27/tax-deductions-are-popular-but-penalties-may-work-better/comment-page-1/#comment-8658 Fri, 28 Oct 2011 08:56:55 +0000 http://blogs.reuters.com/reuters-money/?p=21271#comment-8658 even worse when the carrots are made of paper….. trillions of paper carrots, some very stale

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