Not Enough Loopholes to Make Up For the Lost Revenue

August 16th, 2012 at 9:43 pm

Sure, Ezra does a good job of explaining this…I guess.   But only I…drink it!

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3 comments in reply to "Not Enough Loopholes to Make Up For the Lost Revenue"

  1. Nylund says:

    “Loophole” doesn’t have a well-defined meaning, but, I’d wager that when middle-class people talk about the “loopholes” that need to be closed by high income earners, they’re talking about things like the fact that rich CEO’s often get paid with stock options, resulting in their salary being taxed at the much lower capital gains rate than at the higher income tax rate.

    But when Romney talks about “loopholes” he’s not talking about these things. These are actually the things he wants to protect, if not expand. When he’s talking about loopholes, he means tax expenditures. In total dollars, the biggest three tax expenditures in this country are 1) the exemptions for your employer’s contributions to your health insurance plan 2) Mortgage Interest Deduction, and 3) pension/retirement contribution exclusions (eg. 401(k)s).

    Yes, Romney’s math doesn’t add up. So either Romney is lying when he says his plan is revenue neutral, or he has to extend his “loophole cuts” to the middle-class.

    That makes for an odd case of double-speak. He’s going on TV saying he’s going to lower taxes by closing loopholes. A regular Joe hears that and thinks, “Oh maybe I’ll get to deduct even more housing costs, even more retirement savings, and it’ll be paid for by finally making rich CEO’s pay the tax rates as everyone else!” But really what Romney means is, “I want to lower those rates for the super rich even more, and to pay for them, we’ll have to get rid of those deductions you get for your mortgage, and we’ll have to start taxing your retirement fund and the health insurance benefits your employer gives you.

    The actual consequences are essentially the exact opposite of what the normal person would assume given Romney’s wording!

    And wait til the Tea Party learns that by “government spending” people sometimes mean “tax expenditures” like the Mortgage Interest Deduction. Can you imagine going to a Tea Party rally and explaining that the mortgage interest they deduct is actually gov’t spending and the equivalent of a gov’t subsidy? Imagine telling some home-owning Tea Partier that they live in government subsidized housing and that this “gov’t spending” is going to get cut and thus, their tax bill will increase! I doubt it’d go over well.

    • ohiodale says:

      Democrats talked about eliminating tax deduction for employer sponsored healthcare, 401k contributions, and the home mortgage deduction. I have never once heard Romney say he was for eliminiating any of these loopholes. Do you actually think liberal CEO also do not get paid in stock options? I did not hear Obama talk about eliminating these loopholes for the rich or for the CEO of GE. You are making a great argument for a flat tax or the fair tax. Politicians, on boths sides, use our current tax code to buy votes. This is a fact. I am for creating jobs and I think Obama failed. I am willing to vote in a niew guy who has a great business records. I could care less how much Romney makes as long as he fixes the economy. Do you think people should vote for Obama just because they are jealous that Romney makes his income through investments? This is called cutting off your nose to spite your face.

  2. ohiodale says:

    One more point. The title of this article, “not enough loopholes to make up for lost revenue” makes no sense. To make up lost revenue we need to create jobs. If the number of people working would go back up to pre-recession levels, most of the revenue would be made up. Also, if Obama is so concerned about making up revenue than why did he increase spending by $1.7 Trillion over 10 years with the passage of Obamacare?