There’s a lot to like in a Phil Gramm WSJ piece yesterday. Like this:
Fourth, business subsidies and credits should be eliminated. Ending subsidies to fund lower tax rates improves the efficiency of capital allocation. The sine qua non of tax reform is a more efficient allocation of investment capital. If the tax breaks that create crony capitalism are allowed to survive, then tax reform failed.
Unfortunately, the piece is titled “A GOP Game Plan for Tax Reform.” I think it’s good enough for both parties, but probably too good for either.
Howard Gleckman, Not All Curbs on Tax Preferences Are Created Equal (TaxVox):
Because politicians seem unwilling to confront specific individual tax preferences, it is likely that any broad-based tax reform will be based on across-the-board curbs on deductions, credits, and exclusions.
The world would have been a better place if McDonald’s had paid higher dividends instead of buying pizza ovens and advertising time for pizza people didn’t want. The money might then have been put to better use by other corporations – perhaps even one that actually specializes in making pizza.
But if McDonald’s had paid out a dividend, it would have subjected the money to an immediate round of taxation. In this way, the tax code favors projects like McPizza; it encourages companies to hold onto their capital instead of freeing that capital up for other companies to use. In a better world, it would be neutral between the two.
Robert D. Flach, MY CORRESPONDENCE WITH THE WHITE HOUSE ON TAX REFORM – CONTINUED
Megan McArdle, The Employer Mandate: A Necessary Impossibility:
The alternatives are to delay the whole bill, or resign ourselves to hemorrhaging wads of cash. The IT expert’s instinct to hold things together with some inelegant intermediate kludge won’t work. All the elements of the law are so tightly coupled that pulling one out makes the whole machine go haywire.
Obviously, the preference of the law’s supporters is to hemorrhage cash. Just go ahead and hand out subsidies indiscriminately, the better to build political support to block repeal. But this seems . . . well, I’m struggling for kinder words, but I can’t find any. It seems wildly irresponsible. Not to mention a fundamental betrayal of the promises that were made to get the law passed in the first place.
Have a nice day.
Cara Griffith, Are We Getting Anywhere?
What appears to be happening is that, depending on the taxpayer, state taxing departments are taking a variety of positions in the hope that they will find the one that works best or results in the most tax dollars.
That certainly describes the Iowa approach.
TaxProf, The IRS Scandal, Day 63
Russ Fox, Foreign Gamblers Get Equal Footing
TaxGrrrl, Hot Tips For Safeguarding Business & Tax Records Scanning and off-site back-ups feature prominently.
Phil Hodgen, Opt out (of the OVDI) and get out (of the USA)
Jack Townsend, HSBC India Depositor Sentenced
Brian Mahany, Late Filed Income Tax Returns May Not Be Dischargeable
He faces a life sentence. Russian Court Finds Dead Lawyer Guilty of Tax Evasion (RIANovosti)