Raise Tax Rates Or Cut Deductions, It’s Still A Tax Hike

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House Speaker John Boehner has hinted at Republican willingness to say “yes” to provisions increasing revenues to the federal government, but says Republicans will not support higher tax rates.

Senate Budget Committee Chairman Kent Conrad – whose committee hasn’t actually produced a budget in years – wants it known that this can be accomplished by eliminating deductions:

It is possible to make the tax code more progressive while lowering income tax rates, according to the top Democrat on the Senate Budget Committee.

Sen. Kent Conrad (D-N.D.), the chairman of that panel, told Bloomberg that a tax overhaul that targets certain deductions enjoyed primarily by the wealthy could be a way to avoid broad tax hikes while still making the tax code more progressive.

“It depends very much what you do with things like capital gains and dividends, what you do with other exclusions, tax credits and preferences, but it’s entirely possible that you can have rates at 35 and have a more progressive system,” he said on Bloomberg’s “Capitol Gains,” set to air Sunday.

I’ve supported proposals to end some deductions in the past, in exchange for lower overall tax rates, because I support a simpler sort of tax code. But let’s not kid ourselves about the end result of eliminating deductions without lowering tax rates. That’s a tax hike.

The politicians won’t want to call it a tax hike, but if a policy change results in Americans paying more in taxes, that’s a tax hike no?

And yes, yes, it’s only targeting the “wealthy.” Which, of course, will include “wealthy” small business owners who report their business income as personal income.

A raise in American tax burdens is bad for the country, whether it’s through higher tax rates or fewer deductions. Republicans should resist both. The federal government’s problem is not revenue but spending.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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