When making tax policy, there’s a choice between carrots or sticks: Does the government give taxpayers credits or deductions for doing the right thing (buying their homes, giving money to charity, not emitting greenhouse cases) or penalize them for doing the wrong thing?
The federal government threw in the towel on creating a public option for long-term care coverage last week, and that would seem to be definitive for now.
“Starving the beast” is a favorite conservative strategy for forcing cuts in federal spending. The idea is to deprive the government of revenue in order to force spending cuts – and resistance to new taxes is a central feature of the current Super Committee deliberations in Washington.
What might be most surprising about the myriad economic problems around the globe right now is how many major world economies seem to have been taken by surprise by the concept of debt. Maybe they should have been reading more Margaret Atwood.
The legislation to lift the debt ceiling gives the country a framework for more than $2 trillion in budget cuts over 10 years and avoids default. But it also puts off discussion of taxes for another day — and it’s unlikely that we’ll see any movement on tax reform or significant tax changes until 2012.
Despite the fact that President Obama has started taking aim at tax breaks, fractional ownership is gaining steam post-financial crisis, offering affluent consumers an efficient use of their dollars and time. So if you thought owning a piece of a private jet or Italian villa was just for the Cannes crowd, think again.
We talk a lot about tax rates here, and about whether they might go up in the future and for whom. But to think intelligently about tax policy — not to mention your own tax strategy — it pays to stop and ask: Which tax rate do you mean? And what tax rate matters most to you?
The following is a guest post from Nancy R. Mandell. She is the former Managing Editor of Wealth Manager and OnWallStreet magazines, as well as the newsletter Securities Week. For the past decade, she has specialized in stories concerning women in finance and women’s relationship to money and investing. The opinions expressed are her own.
Daniel J. Mitchell is an expert on tax reform and supply-side tax policy. He is a senior fellow at the CATO Institute. The opinions expressed here are his own.