This is the time of year where all of us have to endure the aggravating practice of doing our income taxes. It is so hard to do that most of us give up and allow a professional to finish the forms. I find it crazy that is the state of things, but that is reality. But maybe there is some light at the end of the tunnel.
This week House Republicans released a tax reform plan that has been three years in the making. Even though most of us have little respect for Congress, I am willing to give them the benefit of the doubt and assume a plan that took three years to make has some merit to it. But what is the reaction of Republican Senate Minority Leader Mitch McConnell? There is “no hope” for enacting tax overhaul legislation this year. John Boehner’s reaction to the plan is “blah, blah, blah.” And these are members of the same party! Democrats oppose it also for various reasons, too.
That bothers me. Why not give it consideration? It impacts every American citizen. But that is the state of our politics these days. Most of our politicians probably think it doesn’t really matter what the people may want. Anyhow, this is an election year so there are more important things to do – fundraising for the election!
I have not read the whole document. Who would want to? There are some elements of this that are really good. The standard deduction would be raised to $22,000, which is nearly double what it is today. That means a single person making $26,000 would pay no income tax. A family of four would pay no taxes if they made about $38,000. That has got to cover a lot of people. Especially our poorest people. Sounds like an idea worth considering right now.
Having said all of that, the plan probably has no chance to see the light of day because of some VERY powerful interests groups. If the standard deduction were to get raised to that level, it would render the mortgage interest deduction a moot point because most people would not need to itemize. The powerful mortgage lobby and banks would fight that tooth and nail. The charitable giving deduction would also be moot. Think the Red Cross, churches, etc will not fight that? The state and local income tax deduction also becomes moot. State Governments will fight that big time. So a proposal that vastly simplifies taxes for most people, and helps the poorest people, gets shot down before it even has a chance.
You would think that those zealots who are constantly screaming about taxes being too high would be all over this. Where are they? You would think that Democrats who whine about poor people being mistreated would be screaming for the increase in the standard deduction because of the numbers I showed above. Where are they? You know, it is really easy to run millions of simulations of taxes for people to see the impact. What if this package were to be beneficial for 70% of people? Would that make it worth considering?