The Los Angeles Times reports:
They're not advertising it, but Republicans in Congress, along with a few Democrats, are exploring the idea of limiting or ending some of Americans' most sacred tax breaks. They include deductions on contributions to 401(k) retirement accounts and possibly those on home mortgage interest, each of which save millions of Americans thousands of dollars each year.What would shutting off these breaks fund? Would it fund education? Would it fund research? Would it fund programs for poor children? Would it fund head start? Hell, would it even pay down the debt? None of the above. You see, the Republicans plan on taking the extra taxes from you, cut programs that would help the most vulnerable, then borrow some more on top of that and pass it on to the super rich and supercorporations. Oh, and they'd also raid social security, end Medicare as we know it, and end newly enacted health care protections for all Americans.
Now, I am no fan of tax expenditures - whether it's for big corporations or mortgage deductions. I am on record in favor of eliminating all deductions, lowering the rates, and raising the amount of income above with the income tax starts being charged (adjusted for family size). Heck, I'm even in favor of replacing our flat taxes (i.e. payroll taxes) by adding it to a progressive income tax. Bottom line, I believe in a progressive tax code, don't think that markets should be distorted by tax preferred activities (whether preferential tax treatment for capital gains or a deduction for home ownership that renters are unable to claim).
It would in fact be great if we could get rid of all the tax expenditures and establish a straight-forward progressive income tax system for both corporations and individuals. But so long as tax expenditures exist, they must serve as a statement of our values. Fairness is not served by the Republican priorities which would continue to preferential tax breaks for big corporations and investment income for individuals and limit "tax reform" only to the area of the narrow area of taxes on income from work. Preserving the rest of the crooked tax code and the special treatment for the privileged while taking away the few tax breaks available to middle class families is the epitome of economic and social Darwinism. It makes a statement: that we do want the government to be involved in skewing economic activity, but that we want it skewed in favor of the elite rather than the masses.
The Republicans in the House are talking about reviewing all of the tax expenditures in the federal code, according to a House aide, but it's funny how the only parts leaking out are the ones that would further tilt the playing field against working families. That's their idea of "broadening the base." It would raise taxes on the poor and the middle class, lower taxes on the rich and big corporations, and severely cut services for children, the elderly, the disabled and the poor.
Tax reform needs to be much more broad-based than what the Republicans are proposing. We need reform in our tax code so that the super rich can't get away with paying a lower income tax rate than most middle class Americans. We need tax reform so that multinational corporations are not paid by taxpayers to drive local mom-and-pop stores out of business. We need tax reform so that people and corporations at the top pay a fairer share into the common good so that we can invest in a common future.
When Republicans get serious about tax reform, when they become willing to end the Mitt Romney tax breaks and the Exxon Mobile tax breaks and the offshore tax shelters, then we can start talking about the tax breaks that middle class families benefit from.