Wednesday, May 3, 2017
TAX REFORM – DOING AWAY WITH DEDUCTIONS AND LOOPHOLES
One of the skimpy details of idiot Trump’s tax “plan” is to offset lower rates with the removal of tax deductions and “loopholes”.
This is a very sound concept that should be embraced in whatever the eventual tax reform package will actually look like.
I have always strongly felt, and continue to do so, that the tax return should not be used to distribute government social welfare and other program benefits. So I believe that items like the Earned Income Credit, the Additional Child Tax Credit, the Advance Premium Credit, the various education tax benefits, and other similar “tax expenditures”, while the idea behind them may be appropriate and acceptable, should be removed from the Tax Code. These benefits should be distributed in other ways.
Here are some of the deductions whose removal from the tax return I would support.
ü Real estate tax deduction for all personal real estate other than the primary principal residence.
ü Personal property tax deduction.
ü State and local sales tax deduction.
ü Acquisition debt mortgage interest deduction for a second personal residence.
ü Home-equity debt mortgage interest deduction – the deduction for interest on home equity borrowing not used to buy, build, or substantially improve a taxpayer’s principal primary residence.
ü Deduction of mortgage insurance premiums as mortgage interest (already gone).
ü Depreciation deduction for real estate and capital improvements thereto.
ü Depreciation deduction for business use of a personal automobile.
ü Auto loan interest deduction for business use of a personal automobile.
ü Auto lease payment deduction for business use of a personal automobile.
ü The adjustment to income for Educator Expenses (why should teachers only be given this benefit and not other public service employees like police, fire, EMTs, stc?).
I discuss the reasoning for my choices in detail in A TAX PROFESSIONAL FOR TAX REFORM.
What deductions would you keep and what deductions would you remove?