What is the difference between a taxidermist and a tax collector? The taxidermist takes only your skin. —Mark Twain
The furor over tax reform is at a boil. Here are some questions with this author’s answers:
Are our tax laws fair?
- Are our tax laws fair? That depends on what’s considered fair. It seems unlikely that they are because wealthy taxpayers and business interests are over represented in government.
- Does proposed tax reform favor the rich? Of course it does. Lower marginal rates favor the rich, as does elimination of AMT and Estate Tax. Expect obfuscation.
- Do tax cuts increase tax revenue? Nope.
- Do low taxes for the rich create jobs? Nope.
- Is SALT a big deal in NYS? In some ways it is.
Reportedly some 20% of us in NY-23 itemize deductions. If the standard deduction is increased, many would no longer need to itemize. Others would lose only a small difference between itemized deductions and the standard deduction. However, some taxpayers heavily taxed by NYS would lose, and that would potentially limit NY State’s ability to fund government. NY tax revenue would be taken out of state. NY is already a donor State.
- Will the SALT exemption be replaced with an equivalent credit? Seems unlikely–if the current exemption and proposed credit were equivalent, there would be no reason for change.
- How important is progressive taxation? If ability to pay is important, progressive taxation makes sense. But it is also important to consider how tax money is spent. If the poor are heavily taxed and enjoy disproportionately lucrative anti-poverty benefits, it could be a win for those people. What’s unfair is to tax the poor to benefit the rich.
- Does deficit spending matter? Yes. When the economy is robust, we should pay down debt. If not now, when?
- What about the deficit? Proposed tax reform is likely to explode the deficit. This fact will be obfuscated. If budget-busting reform passes, it will be followed by calls for indiscriminate spending cuts, perhaps a new sequester law.
- Does Gov. Cuomo favor low taxes for high-income taxpayers? Of course not–he does want income tax revenue to stay here to benefit NYS.
- Will Tom Reed run for Governor? Maybe he will.