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Tuesday, August 7, 2012

Reynolds: Republicans Should Embrace Tax Increases ... on Democrats

Washington Examiner op-ed:  Repeal the Hollywood Tax Cuts!, by Glenn Reynolds (Tennessee):

For the past few years, there has been a drumbeat in favor of increased taxes from Democrats of all stripes. Make the rich pay their "fair share." Get rid of "loopholes." Make the fat cats "chip in a little more." .... Republicans, if they're smart, can nonetheless teach them that tax increases do, in fact, hurt. They should head into the next budget battle with a list of proposals for tax increases that will sting Democratic constituency groups, but which will seem eminently fair to voters.

The first such proposal would be to restore the 20% excise tax on motion picture theater gross revenues that existed between the end of World War II and its repeal in the mid-1950s. ...

Another valuable proposal would limit the ability of tax-exempt organizations to escape scrutiny and hoard funds. To limit foundations' role as perpetual-employment agencies for cause-oriented Lefties (and it's mostly Lefties), Congress might require them to spend at least 10% of their endowment each year, with no wiggle room. ...

Limits on the charitable deduction might be worth considering: Perhaps a $50 million lifetime limit, which should surely be enough for anyone; perhaps a $1 million to $5 million annual limit. Why should fatcats like Warren Buffett be able to get millions in tax deductions that average Americans can't? ...

Limiting the pay of nonprofit leaders (including university presidents and foundation heads) to no more than the pay of a member of Congress or a Supreme Court justice might also be worthwhile. Who needs to make more money than that, especially when it's coming from tax-deductible sources? ...

Beyond this, if Democrats demand truly serious tax increases, Republicans could propose capping the mortgage interest deduction so that houses worth more than $250,000 are ineligible. (You say that hits blue states harder? Darn!) Ending the deductibility of state property and income taxes -- which would also hit residents of high-tax blue states harder -- might also be worth it. These measures would be unpopular with a lot of voters, but they'd mostly be Democratic voters. ...

A little bit of hair-pulling by the GOP, and Democrats may quickly lose their enthusiasm for tax-increase grandstanding.

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Comments

Glenn Reynolds is a mad genius. This article is obviously intended to turn 99.99 percent of the country into democrats by feeding the republicans disastrous policy proposals.

Reynolds makes all of the Republicans supporting this on the Washington Examiner comments page sound both vicious and stupid.

1. Taxing theater receipts because hollywood is liberal

Yes, that doesn't violate the 1st amendment in the least.

And I'm sure military recruiters and large consumer products corporations won't mind having one of their leading marketing channels taxed into oblivion.

Nor will Rupert Murdoch mind his investments in media being devalued.

2. Defund Non-profits

Great idea. Lets destroy the independence of the universities and the churches, and wreck every museum, ballet company, opera house, hospital, research center, and civil-society based anti-poverty program in the country.

And once we've obliterated civil society and religion, everyone will be ready to join the Hitler youth / Young Republicans and invade Poland / Iran.

I'm sure people of faith will love having their churches metaphorically burned to the ground.

3. Limiting executive pay

Sure, why does anyone need to make more than the $400,000 per year that the President of the U.S. makes?

That includes people at for-profits, and heirs who inherit their fortunes rather than working for a living.

How about a 100 percent tax on all income--of anyone--above $400K per year?

I'm sure that will go over very well with David and Charles Koch.

4. Capping the mortgage interest deduction

The mortgage interest deduction is already capped at $1.1 million (including home equity indebtedness), which will not buy you a very nice home in the few communities in the U.S. that still have decent public schools and access to employment centers.

But why not reduce the mortgage interest deduction to $250K?

That will show every educated worker in the country--Doctors, Dentists, Engineers, Lawyers, Scientists, Professors, mid-level managers etc.--that they are not rich enough to be Real Republicans.

Real Republicans are CEOs of fortune 500 companies, Forbes 400 heirs, or run their own hedge fund or P.E. shop.

Forget the 1%. Republicans only have room for the 0.01%.

Posted by: Anon | Aug 7, 2012 7:49:42 AM

Dear, Anon | Aug 7, 2012 10:49:42 AM

Straw Man, much?

Posted by: Leahcim | Aug 7, 2012 8:18:59 AM

I live in Louisiana. We reduced taxes on the Hollywood bunch and they have moved here in droves. We have more movie stars than California. So, yes, they are aware of taxes and consequences. They just get more deals from the government, that should stop.

Posted by: David7134 | Aug 7, 2012 8:22:47 AM

I endorse Mitt Romney even if he has exceeded the $50 million lifetime limit on church donations, and I think a 20% tax on movie tickets is a great idea. We can use the money to send TSA screeners and flight marshals to multiplexes, making the theatres safe for democracy.

In any case, the same material by Glenn Reynolds about the movie industry has been published elsewhere, and a blogger last month posted background information on it, including a movie short from 1953 about how harmful the excise tax is to the small business of theatre ownership. One out of every four movie houses were closed.

"Got to love the humble `picture exhibitor` that details his meager salary in comparison to the excise tax being taken right out of the mouths of his family. The widow struggling to keep the theater going after her husband died. The whole film is filled with folksy, down-to-earth people no central casting could ever find. Just good folks wanting to run their business without having to carry Washington on their backs."


http://prudencepaine.com/tag/corporate-taxes/

Posted by: Not Clint Eastwood | Aug 7, 2012 9:00:29 AM

I agee with all of the proposals.

Posted by: anony | Aug 7, 2012 10:39:43 AM

The Bowles-Simpson tax plan would have capped tax benefits for mortgage interest at $250k principal. Whether you like the idea or not, it not radical.

Posted by: AMTbuff | Aug 7, 2012 12:23:11 PM

Dear Anon: I think you now get the point. Raising taxes has consequences, like the 700,000 jobs lost by hiking taxes on the wealthy. The desire to hurt the rich only hurts the poor and middle class in the end.

Posted by: Georj | Aug 7, 2012 12:31:32 PM

Isn't limiting the mortgage deduction and eliminating deductibility of property taxes and state income taxes what Mr. Romney is proposing (we think, not sure because he won't say)as a way to offset lower tax rates by broadening the base?

And exactly which left leaning foundations are we talking about here, the Cato Institute? the AEI? the 17 Conservative economic foundations associated with Stanford? And by the way, requiring all of them, plus colleges to spend at least 10% of their endowment every year is a great idea. It really is.

Posted by: David R. | Aug 7, 2012 5:42:57 PM

The lesson of Bowles-Simpson is that a Presidential panel which comes up with plans that don't substantially increase taxes and federal spending will be ignored by the President.

Posted by: Woody | Aug 7, 2012 6:16:14 PM