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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  • kevindf

    Gaylord and Little Lord Pomeroy should repay all that money they grew up collecting.

  • Mike Quinn

    The greedy right wing rats have been sent a clear message the American people want the rats to pay their share of taxes and quit winning.

    • ‘Tom Crawford

      How much money do you think is thier “fair share”?

      Will Smith seemed to balk and say God Bless America when during an interview he heard France was putting a 75% tax on the rich. When does it become “their fair share”?

      Or do you believe that just because they have more than you do, that your entitled to what is theirs?

    • sbark

      …they sent a clear message they want the free stuff to continue, they just want an excuse to keep the spending coming……….problem is, in order to do that, “rich” will have to redifined down to about 35,000 per year.
      Under Clinton rich was 2 million……..the Dem’cats redeifined it down to 250k without doing the math, for their spending addiciton to continue to be able to buy votes from the moochers……rich needs to be 35k per year………

    • $8194357

      I liked you better with your sock puppets to hide behind..

  • Roy_Bean

    The first “enhancement” should be to cut the pensions of retired representatives and senators. The second should be to put them on Obama care like the rest of us.

    • $8194357

      10X

  • BadgerFan82

    The main thread if rhe article is spot on. Either way, it is a tax hike. So my question to the crowd is what specifically would you cut funding to if you had your preferences?

    I’ll preemptively acknowledge that just about every suggestion will be drops in the bucket compared to Medicare, Medicaid, Social Security, and the military budget, but when you place a bucket under a leaky faucet, you eventually get a full bucket.

    The more details the better, and bonus points for saying not only what you would cut but why it’s not worth the price tag.

    • BadgerFan82

      Really? No takers? Considering the Republican plan is that everything has to be cuts, I thought you would all have your favorites. I guess I’ll go first, but I hope those of you who provide feedback are willing to put y our own ideas forward.

      There are currently $4 billion in subsidies paid to oil and gas companies annually. $2.4 billion go to the five biggest oil companies, the other $1.6 go to smaller companies. I say leave the $1.6 billion in place. Take the $2.4 billion, and put half of it towards reducing the deficit. Take the remaining $1.2 billion, and use it to subsidize research for improved methods of producing biodiesel and producing said biodiesel, specifically from sawgrass and other non-crop sources. This may cost some jobs in the oil industry, but would increase jobs both for companies researching and producing biodiesel as well as for farmers growing the raw materials.

      It would help us towards energy independence. While it’s likely we don’t have enough arable land for biofuels to replace petroleum, it could help reduce the amount we import. If I’m wrong, and we can produce enough to offset not only the amount we import but also some portion of the domestically produced diesel, it would have the added benefit of reducing the risk of oil spills which adversely affect everybody in the vicinity for years afterwards.

      In addition, it would help keep costs for corn down, which would in turn reduce costs for meat and for processed products that depend on corn syrup (not the best for our national health, but that can be addressed separately, or not addressed if that’s your preference).

  • still a sioux

    No more fuel assistance for college students who choose not to live in a dorm, (asuuming there are rooms available, of course,)where utilities are paid, and instead opt for renting a house off campus.

    • BadgerFan82

      Wait, is that seriously part of the ND tax code? (I left ND for school, so never noticed it).

  • $8194357

    Budgetless chickenhawk…

  • Waski_the_Squirrel

    Deductions have been used to favor certain industries, practices, and individuals. I won’t say I’m a flat tax guy, but I am in favor of simplifying the tax code by cutting the deductions. The fewer deductions, the fewer people needed in the taxpaying industry…both in the IRS and on the private side.

  • sbark

    Is it a tax hike or a subsidy/consumer welfare cut?
    Home Mtg Int. deductions, College Tuition tax credit, Earned Income credit, IRA deduction………..are they not all things Indiv’s with responsibility should be doing on their own without govt involvement………..
    but thats right……….Obama Cares enough to give anyone who wants it, a lifetime of welfare and govt dependency………
    ….its a GOP enticement toward a flat tax system……..

  • Lynn Bergman

    Typical Democrat cherry-picking. I am not in agreement with Grover Norquist that an initially revenue neutral lowering of rates and elimination of deductions (income tax only) is a ta increase… although over time it would increase revenues due to economic growth.
    Increasing the rates for unearned income (capital gains, dividends) is a bad idea because it punishes investors in our economy. Investors are the people who drive our economy, not government handouts like the revered but stinkingly stupid farm program.

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