Some Early Thoughts on the Tax Reform Proposal

…triggered by Laura Saunders’ piece in Wednesday’s Wall Street Journal.

Beginning with the headline and thesis of her piece: Winners and Losers Under the Trump Tax Plan. Because Government should be about picking winners and losers instead of just protecting a level free market for all.  Sure.

Now a couple of specifics.

People with large medical or disaster deductions. Each of these write-offs on Schedule A has significant hurdles and is only available to taxpayers with large unreimbursed expenses

This one isn’t particularly relevant to tax reform. It just means that four Republican Senators who prefer preserving Obamacare intact over even a first step toward repealing/replacing it need themselves to be replaced with Republican Senators who are serious about getting rid of Obamacare and its destructiveness.

Losing the State tax deduction? That only impacts a couple of States with enormous spending habits; those citizens need to correct their State government errors.  The citizens of the other States don’t need to be dragooned into indemnifying the foolishness of those couple of States.

The mortgage deduction loses value under tax reform? Yeah, and? Punish those who don’t itemize by taxing them more (vis., not raising the standard deduction) so others can have a deduction? Beyond the cynicism of this special interest nonsense, our tax code shouldn’t be in the business of social engineering in the first place.

This proposal is a good first step in tax reform.

Now we just need to disabuse politicians that every bill is the last word on a subject rather than an interim as we move toward our goal: a flat tax in the neighborhood of 10% on all income, regardless of source, and the elimination of all deductions, credits, and other froo-froo.

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