Tax Advisory Board Misses Objective
The Presidents Tax Advisory Board was assigned the task to review and recommend changes to the internal revenue code. In other words reform the code, or replace the code. The board missed their mark by recommending the reduction of the interest mortgage deduction, and the elimination of state income tax, and property tax deductions. Are raising taxes their idea of reform?
What an incredible waste of time. These proposals should be dead upon arrival. These recommendations will cause devastating harm to the housing market, increase taxes, and dramatically lower home values.
If one will remember the housing market was the impetus that kept the economy afloat following the bleak days of 9-11, during an ongoing slowdown in the economy the president inherited. One in every four jobs in the country are related to housing. To recommend actions that would harm this critical element to the economy is foolhardy. Just as housing kept the market afloat in bad times, it can also bring it down in good times. The housing market is already under significant pressure from rising interest rates, and in many markets from satisfied demand. In other words housing is already heading toward a cyclical slowdown.
If the mortgage interest deduction proposal passes, a conservative estimate is that home values will drop 15%. If this is true many homeowners will suffer the fate of owing more than their home is worth, property taxes will decline with falling property assessments (eroding local governments tax revenues), and mortgage lenders may see increased foreclosing rates resulting in losses of significant proportion. Many homeowners budgeted the mortgage interest deduction when purchasing their home, and may not be able to afford their home if the boards' proposal is passed into law. At the very least, every homeowner in the 15% tax bracket up, will have less disposable income to spend on goods and services. There is no doubt this proposal negatively impacts the purchasing power of potential homebuyers which will result in lower home prices.
What a brilliant idea to eliminate state income tax and property tax deductions! Tax money you pay on taxes! After all, you can eliminate two lines from the tax return form. What a brilliant reform strategy. The bottom line is that dependent upon your tax bracket it is going to increase your federal tax liability, further decreasing the disposable income of families that could be spent in the economy on goods and services.
It seems simple. Why has the economy grown so dynamically in the face of two devastating hurricanes? Why has the economy added millions of jobs in the past two years? Why is unemployment down to 5%? Why has the projected budget deficits fallen 40% below estimates? Tax cuts. When American families get to keep the money they earn, instead of sending it to Washington, they spend the money on goods and services. This creates more demand for goods and services, which creates more jobs, which generates more tax revenue to the government, than any tax increase could ever generate.
The assignment was to reform the tax code, not to raise taxes. The President should throw the Tax Advisory Boards recommendations in the trash. The problem with this board is they are retired congressman and senators living off fat pensions, and don't have to earn a living laboring in the economy. Even in retirement politicians can find ways to spend other peoples money, reminding us that you can't teach old dogs new tricks. My advice is to form a new board consisting of private sector business people that actually earn a living and pay taxes from the fruits of their labors, who understand the oppressive complexity of the current tax system.
If the President is serious about tax reform he should press the immediate passage of making the tax cuts permanent. That would keep the economy growing while the new Tax Advisory Board could come up with a lasting and meaningful reform to the current IRS Code that is simply unsustainable, oppressive, and counterproductive.
Following permanent tax cuts being implemented, then it will be time to control the spend happy congress. Republican leadership in congress, and the executive branch have failed the American citizen by allowing runaway spending. The Democrats are no better, and are waiting for the voter revolution by conservatives that are fed up with the inaction of their leaders. A golden opportunity to make real and meaningful spending decisions with a Republican controlled Presidency, Senate, and Congress has been wasted to date. If action is not taken before the congressional elections of 2006, another opportunity may not become available for decades. Enough is enough, conservatives must begin to act like conservatives or get thrown out by their ears.
What an incredible waste of time. These proposals should be dead upon arrival. These recommendations will cause devastating harm to the housing market, increase taxes, and dramatically lower home values.
If one will remember the housing market was the impetus that kept the economy afloat following the bleak days of 9-11, during an ongoing slowdown in the economy the president inherited. One in every four jobs in the country are related to housing. To recommend actions that would harm this critical element to the economy is foolhardy. Just as housing kept the market afloat in bad times, it can also bring it down in good times. The housing market is already under significant pressure from rising interest rates, and in many markets from satisfied demand. In other words housing is already heading toward a cyclical slowdown.
If the mortgage interest deduction proposal passes, a conservative estimate is that home values will drop 15%. If this is true many homeowners will suffer the fate of owing more than their home is worth, property taxes will decline with falling property assessments (eroding local governments tax revenues), and mortgage lenders may see increased foreclosing rates resulting in losses of significant proportion. Many homeowners budgeted the mortgage interest deduction when purchasing their home, and may not be able to afford their home if the boards' proposal is passed into law. At the very least, every homeowner in the 15% tax bracket up, will have less disposable income to spend on goods and services. There is no doubt this proposal negatively impacts the purchasing power of potential homebuyers which will result in lower home prices.
What a brilliant idea to eliminate state income tax and property tax deductions! Tax money you pay on taxes! After all, you can eliminate two lines from the tax return form. What a brilliant reform strategy. The bottom line is that dependent upon your tax bracket it is going to increase your federal tax liability, further decreasing the disposable income of families that could be spent in the economy on goods and services.
It seems simple. Why has the economy grown so dynamically in the face of two devastating hurricanes? Why has the economy added millions of jobs in the past two years? Why is unemployment down to 5%? Why has the projected budget deficits fallen 40% below estimates? Tax cuts. When American families get to keep the money they earn, instead of sending it to Washington, they spend the money on goods and services. This creates more demand for goods and services, which creates more jobs, which generates more tax revenue to the government, than any tax increase could ever generate.
The assignment was to reform the tax code, not to raise taxes. The President should throw the Tax Advisory Boards recommendations in the trash. The problem with this board is they are retired congressman and senators living off fat pensions, and don't have to earn a living laboring in the economy. Even in retirement politicians can find ways to spend other peoples money, reminding us that you can't teach old dogs new tricks. My advice is to form a new board consisting of private sector business people that actually earn a living and pay taxes from the fruits of their labors, who understand the oppressive complexity of the current tax system.
If the President is serious about tax reform he should press the immediate passage of making the tax cuts permanent. That would keep the economy growing while the new Tax Advisory Board could come up with a lasting and meaningful reform to the current IRS Code that is simply unsustainable, oppressive, and counterproductive.
Following permanent tax cuts being implemented, then it will be time to control the spend happy congress. Republican leadership in congress, and the executive branch have failed the American citizen by allowing runaway spending. The Democrats are no better, and are waiting for the voter revolution by conservatives that are fed up with the inaction of their leaders. A golden opportunity to make real and meaningful spending decisions with a Republican controlled Presidency, Senate, and Congress has been wasted to date. If action is not taken before the congressional elections of 2006, another opportunity may not become available for decades. Enough is enough, conservatives must begin to act like conservatives or get thrown out by their ears.
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