TWO RECENT TAX POSTS WORTH DISCUSSING

During my wanderings on the web in search of BUZZ-worthy items I recently came across two blog posts that require more attention than a mere listing in a BUZZ installment.

The first is “The Tax Code In 2014 -- It Still Stinks” by Christopher Bergin at FORBES.COM.

As is common with Christopher’s commentary, the nail head is forcefully and accurately struck when he talks about the idiots in Congress and the Tax Code.

Speaking about the return of PEP and Pease and the new Net Investment Income tax he calls them “stealth taxes” and explains -

“. . . they are sneaky and cynical and a perfect illustration of the contempt our politicians have for the tax code and taxpayers – which is why the tax code is rotting, and why they don’t do a thing to address that.”

And Congress’ contempt of the Tax Code and taxpayers leads to our contempt of the idiots in Congress.

I used to refer to PEP and Pease as “back door taxes” or the “Read My Lips Taxes”.  The elder Bush attempt to avoid breaking his promise by going through the back door.  He didn’t raise the bridge – he lowered the water.

And, as Christopher points out –

“The NII {Net Investment Income = rdf} tax is a result of Obamacare, and yet another example of what a mess that legislation really is (I’m still trying to figure out why we had to pass it to find out what was in it).

Obamacare is the classic example of the fact that the idiots in Congress do not read the laws they vote on – they merely do what they are told to do, vote yes or vote no, by the Party “leaders”.

The basic idea behind Obamacare is a good one – an attempt to provide universal health care coverage via the existing insurance marketplace.  However the legislation was not given sufficient serious thought (something the idiots in Congress are incapable of) and was pushed through Congress hastily for political expediency to give BO an early win.

These three new taxes for “the wealthy” for 2013 are bad tax policy that just add more unnecessary complexity to an already FU-ed Tax Code.

The second post surprises us by reporting on an actual good common sense proposal from one of the idiots in Congress.  Kyle Pomerleau of the Tax Foundation’s TAX POLICY BLOG reports that “Marco Rubio Proposes a Replacement for the Earned Income Tax Credit”

In a recent speech on the 50^th Anniversary of the “War on Poverty” Republican Rubio, the junior United States Senator from Florida, “mentioned that he wants to replace the Earned Income Tax Credit (EITC) with a low-income wage subsidy”.

Government welfare programs in general, and the Earned Income Tax Credit in particular, do not belong in the US Tax Code.

The post, and Rubio. hits on two good reasons why the EITC must go –

“One weakness of the EITC compared to the minimum wage, however, is the fact that low-wage workers only see the refundable tax credit once a year in a lump sum, rather than a small increase in their paycheck over a full year.”

And –

“Currently the Earned Income Tax Credit has one of the highest payment error rates of all federal programs that cost between $11.6 and $13.6 billion in 2012. Whether these payment errors are due to intentional fraud and abuse or the program’s staggering complexity is up for debate (it is likely a mixture of the two).”

The post tells us –

“It is not entirely clear what form the replacement wage subsidy will take. It could take the form of a tax credit to employers who hire low-income workers or a transfer to low-income workers. Either way, Rubio believes that the subsidy will be an improvement over the EITC.”

I have not read the rest of Rubio’s “anti-poverty” proposals, and am aware that he was once a favorite of the Tea Party extremists (although maybe not so much anymore) – but I am glad he wants to take the EITC out of the 1040 and replace it with a direct payment program.

The idiots in Congress must understand that the purpose of the Tax Code is to raise the money needed to run the government – PERIOD.  It should NOT be used to distribute the benefits of government welfare or other programs.  And it should NOT be used to redistribute wealth.

TTFN