Click History for a list of changes and updates.
Tax reform is the subject of Congressional conversation, but actions are not being taken. The proposals by Simpson-Bowles and the Senate's "Gang of Six" provide a model for beginning the legislative process.
The continuation of this post provides Senator Car Levin's seven-point proposal for his plan to reduce the deficit. His plan was submitted to the Joint Select Committee on Deficit Reduction (Super-Committee). Included are comments on the seven points based on my research.
Don Nordeen
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Continue reading Senator Levin's Seven-Point Plan to Reduce the Deficit.
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Senator Levin's Seven-Point Plan to Reduce the Deficit (continued)
From Gaylord Herald Times, 2012 Feb 29, page A-4.
WASHINGTON — U.S. Sen. Carl Levin of Michigan submitted the following seven-point deficit plan to the Joint Select Committee on Deficit Reduction.
He believes the plan will lower the deficit by $1 trillion over 10 years, while protecting the middle class. He has followed up by introducing legislation to implement the plan.
- Combat offshore tax abuse.
- Eliminate a loophole that forces taxpayers to subsidize stock options for corporate executives.
- Eliminate the "carried interest" loophole that forces taxpayers to subsidize the pay of hedge fund managers.
- Eliminate the derivatives "blended rate" loophole that promotes speculation in futures and options, favoring derivatives over long-term investments that boost economic growth.
- Replace the wasteful and inefficient system of paper ax lien filings the Internal Revenue Service now uses with an electronic system accessible to the public at no cost.
- Restore Clinton-era income tax rates for incomes of $250,000 or more.
- Restore Reagan-era tax rates on capital gains.
Comments. Numbers in [ ] refer to references in the endnotes.
| Senator Levin's Proposal |
Comments |
| Combat offshore tax abuse. | Specifics needed. |
| Eliminate a loophole that forces taxpayers to subsidize stock options for corporate executives. | Agree. The cost of stock options is a cost of employment. All such costs should be treated the same. |
| Eliminate the "carried interest" loophole that forces taxpayers to subsidize the pay of hedge fund managers. | Agree. This tax preference should be eliminated unless there is convincing evidence that it helps the economy as a whole and does not contribute to income inequality [2]. |
| Eliminate the derivatives "blended rate" loophole that promotes speculation in futures and options, favoring derivatives over long-term investments that boost economic growth. | Agree. This tax preference should be eliminated unless there is convincing evidence that it helps the economy as a whole and does not contribute to income inequality [2]. |
| Replace the wasteful and inefficient system of paper tax lien filings the Internal Revenue Service now uses with an electronic system accessible to the public at no cost. | Implement where feasible, but retain all communications to those subject to the lien. |
| Restore Clinton-era income tax rates for incomes of $250,000 or more. | A piecemeal approach is likely counter-productive. Recommend Simpson-Bowles as the model for tax reform: expand the tax base by eliminating loopholes and deductions with lower tax rates [1]. In addition, tax preferences for capital gains, dividends, carried interest and other special incomes should be eliminated [2]. Eliminate the double taxation on dividends [4]. |
| Restore Reagan-era tax rates on capital gains. | Eliminate the preferential rate on capital gains because it does not increase investment, and is a major factor in income inequality [2]. |
Endnotes — Other Posts on Tax Reform
- [1] On the Agenda for Congress: Tax Reform Plus
- [2] Capital Gains, Economy and Income Inequality
- [3] Debt and Deficits are a Potential Disaster
- [4] Double Taxation on Dividends
- History: Changes are usually identified in the text with the date which facilitates searching by date. Edits are usually noted by add and
deletechanges. - 2012 Mar 03 — Initial Post
- Links: Senator Levin's Seven-Point Plan to Reduce the Deficit at [http://curntbk.blogspot.com/2012/03/senator-levins-seven-point-plan-to.html]
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Copyright 2005-2012 © Donald L. Nordeen. All Rights Reserved. See Copying Posts on This Weblog.
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Copyright 2005-2012 © Donald L. Nordeen. All Rights Reserved. See Copying Posts on This Weblog.
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