Regarding Bush's announcement on tax code

[Francesca]

can someone expand on what those "Changes" he promised to make might be? I am a little nervous he is talking about a flat tax...

[wurzel]

1. He may be talking about a consumption tax. Even worse.

[Ducks In A Row]

2. getting rid of the mortgage deduction was one I heard about

[Francesca]

3. christ I hope your wrong!!

[Strelnikov_]

8. God, I Hope They Institute At 23% Sales Tax And Eliminate Mortgage Ded

That would be the turning point.

[watrwefitinfor]

4. Here's a possibility

See Jim DeMint's campaign in SC. He first ran on the idea of a 23% flat sales tax and 'getting rid of the IRS'. Tennenbaum called him on it, showing plain and simple in her commercials how regressive that would be. He changed his commercials to say Tennenbaum was lying; said it wouldn't hurt poor people because 'everybody' would get a check back from the federal government for $400 to offset the sales taxes they would have to pay on food, medicine, cars, homes. (Very specific on the amount everyone would get back). She kept hammering him on it. Then when they were on MTP and Russert was taking DeMint apart, the weasel denied having ever said he was for it at all. He squirmed and hemmed and hawed and would not repeat it on national tv. But then he came back and in the final days he was running ads again about getting rid of the IRS. 'Wouldn't we all like to get rid of the IRS?'

Well, wouldn't you?

So now he's one of *'s little soldiers - um - Senators in the war on the poor.

Wat

[Francesca]

5. Forgive me but I have a very

poor understanding of where they plan on recovering the loss of tax income in that circumstance.. I realize it's appealing to corporations and wealthier Americans but the plan is so radical it's hard to believe any one would support it... where do they plan to make up the income loss?? sorry I am young and only newly interested in politics........ am totally perplexed and concerned... my husband and I decided not to have children in the event of a bush re election... our property taxes have gone up so much this year we are considering selling our house (NH residents)... there has been a direct correlation between the "Tax Relief" we received and the increase in our local taxes here... FUCKER!!!!!!!!! whoops sorry ... am really tired of the way they have crowned them selves the moral party as well... absolutely disgusting... well lets stick to the tax question here..

[Strelnikov_]

9. What A Great Idea. Once Everyone Begins To Buy As Much As Possible

through the black market, or barter system, to avoid 30% taxation (w/ State/Local) there will hardly be a tax base left.

Where does the idiot reich wing think the money for their beloved corporate giveaways and bloated military machine come from.

[American Tragedy]

16. Yeah, like $400 would even come close to covering it

[wishlist]

6. H.R 25 that Repubs sponsored calls for adoption of flat federal sales tax

Over 30 Republican Congressman have co-sponsored House Resolution 25 that calls for elimination of the IRS and all federal income and payroll taxes. Instead, the states would administer a 23% (or more) national sales tax applying to all goods and services including food, clothing and medicine. Only exemptions would be for used merchandise and for purchases made by businesses. To help compensate for the unfairness and hardship to lower income people who now pay little or no federal taxes, supporters of this plan claim that there would be a small monthly payment to every person or head of household based on where their income relates to the federal poverty level. (Obviously though the states would have to increase their staffs to handle all the extra record keeping and red tape)

This would of course create great pressure to privatize and reduce spending for all Federal programs since there would almost certainly be less revenue generated (and no more trust funds from defined Social Security or Medicare payroll taxes). State and local govts would probably have to raise taxes to make up for shortfall from the Federal govt.

Repubs have a hopeful theory that the elimination of all corporate and business taxes will result in prices going down for all products and services since they will no longer have to charge customers as much to make a profit.

Looks to me like they are engineering a huge windfall to the wealthiest Americans and business interests.

[Francesca]

7. thanks for taking the time

to answer my question... I think based on what you have said and others have hinted at it that it might be fair to say that the massive deficit we are facing was deliberately created to help insure the end of social programs... which people will be needing more desperately than ever after another 4 years.. Pretty depressing..

[jsquared]

10. There's no way this will go through. The elimination of the mortgage tax

credit would burst the housing bubble right away.

[Digit]

11. Only a few areas are in a bubble, the rest are stagnant

Foreclosures and bankruptcies are at an alltime high.
I shudder at what I fear is going to happen.

[Mike03]

12. Paul Krugman and Al Franken on Tax Code

The other day Franken said that Bush was misleading to use the term reform because what he wants to do is make permanent tax provisions set to expire.

These next comments are excerpted from a speech Paul Krugman gave (in London, I think, and available at the Unofficial Paul Krugman site--it is an acrobat document so there is no link on my copy):

"The truth is that the current (deficit) projection which says that the budget deficit is going to fall is based in part on expiring tax provisions which the administration is lobbying hard to have made permanent. So what they are saying is the budget deficit will shrink substantially according to our plan which depends upon Congress not doing what we ask them to do... aims to use Budget Deficits as a way to force fundamental cuts in goverment programs... these programs which we can't cut, and taxes that we can't raise, and we have these enormous deficits which continue until the financial markets say 'wait a second,' and all hell breaks loose... What you are really talking about here is a program of cutting taxes and then cutting spending on entitlement programs. For all we may say about wasteful government spending, the programs that would have to be cut are transfer programs to the general public--primarily to the middle class... Broadly speaking these are programs that go to ordinary families, the public at large counts on these programs."

What I glean from this is that by making the tax code permanent, there will be "no choice" but to begin to hack away at the social programs that this administration has targeted all along.

[SouthStar]

13. Nothing is permanent

There is no such thing as a permanent tax cut or a permanent change to the tax code. Congress can at any time make changes.

[ramapo]

14. There should be mortgage deduction reform (cap)

The average taxpayer subsidizes the upper crust who buy the million-dollar+ homes which require hugh mortgages with hugh interest deductions.

Somehow I doubt Bush would propose that reform.

[SouthStar]

15. There is a cap

There already is a cap on the amount of mortgage interest that can be deducted. I do not kno what the number is though. Someone else here does I am sure.

[TheCentepedeShoes]

17. I'm taking a tax class right now

and there is a cap although we aren't getting into it in our course because we're very unlikely to come across such a situation. Basically the rule is that interest on acquisition debt (for buying, building, or improving a home) is deductible as long as the debt is under $1 million dollars (or $500K if married filing separately) for the tax year and interest on home equity debt (used for other purposes like buying a boat) is deductible as long as the debt does not exceed $100K (or $50K) for the tax year OR the difference between the fair market value of the home and the remaining acquisition debt, whichever is less. Still talking about a lot of moola.
Anyone please feel free to clarify or correct.