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I bleed Burnt Orange!
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Discussion Starter #1
On 1 November, President Bush's Tax Reform panel is set to release its recommendations. It's target?

The middle class:

The drama in Washington today centers on efforts to get to the bottom of conversations, and the ultimate result of one such effort may be the indictment of one or more Bush Administration officials, which would be a big deal. But don't lose sight of something that might be of greater immediate interest to the public: the fact that President Bush's tax reform panel, which is expected to send him its recommendations by November 1, is proposing to scale back two of the nation's most popular tax breaks, for home mortgage interest and employer-paid health insurance.

The panel is proposing the rollback as a way to compensate for its also-proposed elimination of the alternative minimum tax, which is affecting more and more middle-class taxpayers every year and is in serious need of fixing. Still, as one Washington-based economic analyst points out to First Read, while this may be good policy, it won't play well in town halls. Unless these recommendations somehow go away between now and November 1, tax reform may not look so much like the savior of the GOP domestic agenda.
While the AMT is something that sorely needs to be fixed, since people of middle income range are being impacted by a program that was designed only for upper income ranges.

However, the other two are really bad.

The Mortgage interest deduction is one of those programs that has done more to spur home ownership then any other program to date.

The other one, is the tax deduction that corporations receive for offering health insurance to its employees. Remove or reduce that tax incentive, what other incentive is there for corporations to provide affordable health insurance for employees? Cost cutting the is corporate mantra for the the past few years, with no let up in sight. So, one easy way to cut costs, is to reduce benefits to employees. Particularly if the costs associated with those benefits rise sigificantly in one fell swoop.

I suspect that if this deduction is reduced enough, or eliminated altogether, the pressure for the government to do something, as millions of people start to lose their health insurance coverage, will become great.

I personally think that if it comes to pass, this will be one of the final nails in the coffin of resistance to a national healthcare system (which incidentally I support). However, in the interim between the cut of that tax deduction, and the implementation of a program to replace it, there will be a major health crisis in the US, as the people who previously had health insurance, now have to figure out a way to get it on their own, assuming they could afford the prices that insurance companies charge.

Throw in the whole pre-existing condition crap, and you will have potentially millions of people who can no longer afford the necessary healthcare for themselves, or their family.

I know from my personal experience, that the $300/month I pay for my family now, will at least double, though probably closer to 3 times or more if I have to pay the entire premium myself.
 

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:rant2:

Can't believe they are going to mess with my house interest!


I noticed that they didn't take back the taxes for the upper 1% after Katrina as well...guess the middle class is who pays for this country - all the while we get poorer and poorer in the process.
 

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Those idiots did nothing. All they did was ensure that the lawyers on K Street will still have a job. Instead of putting in place change that would make a differnece and make our economy grow like gang busters, they sat on their hands and wussed out. :mad:
 

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Aphid is FUN!
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The poor do not pay any income taxes because of EIC.

The wealthy are not affected by income taxes because they can afford to hire tax attorneys and tax shelters to shield their income from the IRS.

So, deduced logically, an income tax is destined to screw which class?:eek5: Hint...read the thread title.;)

These proposed changes are troubling because they are designed to target those who are not trying to cheat the government on their taxes. Maybe the tax reform panel's ultimate goal with these changes is to enrage people so they support the Flat-Tax or the Fair Tax. I certainly didn't need this prodding.

David, do you have a link for the article you quoted? I'd like to learn more about it.
 

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And add to that that we give large industry tax incentives and then some that shelter their taxes offshore in places like the Camyan Islands...Haliburton being one of those.

http://levin.senate.gov/newsroom/release.cfm?id=218710
Congress reported that Halliburton owns 17 subsidiaries in tax haven countries, including 13 in the Cayman Islands, which has no corporate income tax, two in Liechtenstein and two in Panama.
Maybe...just maybe if they actually made industry pay to polute our piece of the earth we might have the taxes needed instead of raping the middle class.
 

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I bleed Burnt Orange!
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Discussion Starter #6 (Edited)
CaptainXeroid said:
David, do you have a link for the article you quoted? I'd like to learn more about it.
I'm sorry. I thought I put in the link. Brain fart. Let me try and locate it.

I know it was in a section of the MSNBC site called First Read, in which the editors put up a quick synopsis of what stories coming down the pike.

I will see what I can find.


Update: NBC makes it hard to find archived copies of their news letters.

Here you go: First Read for Wednesday 12 October
 

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I bleed Burnt Orange!
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Discussion Starter #7
Here is an article about these recommendations:
Bush tax panel wants mortgage interest deductions reduced

Los Angeles Times

Wednesday, October 12, 2005

WASHINGTON — President Bush's tax reform commission informally agreed Tuesday to recommend limiting the home mortgage interest deduction to the interest paid on the first $300,000 or $350,000 of a mortgage, far below the current law's limit of $1 million.

The panel also informally recommended taxing some employer-provided health benefits and is considering recommending an expansion in the deduction for charitable contributions.
Source: Palm Beach Post
 

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I bleed Burnt Orange!
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687 Posts
Discussion Starter #8
At first glance, it looks like the mortgage deduction isn't all that bad, as it maintains the current deduction up until $300k.

However, if you live in an area (say around Washington DC), in which you are looking at $300k + to get into a starter home, then the people who have struggled to get their situation where they can purchase a home in these areas, are now SOL.
 
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