Paul L. CaronDean
Sunday, October 20, 2019
By Paul Caron
There is a bit of movement in this week's list of the Top 5 Recent Tax Paper Downloads, with a new paper debuting on the list at #5:
Scholarship, Tax, Tax Scholarship, Top 5 Downloads | Permalink
A capital gains tax doesn't have to be retrospective. A much simpler approach (and one that already has a decent amount of support) is to equalize taxes on income from wealth and income from work, as President Ronald Reagan did in the Tax Act of 1986. Unfortunately, that long-sought goal of the left was given back not long after it was achieved (as it happens, given back by President Bill Clinton.
Posted by: Gerald Scorse | Oct 20, 2019 11:42:19 AM
Gerald, while I suspect you and I are on opposite sides of the political spectrum, I agree with you on taxing capital gains as ordinary income. (Dividends also need to be taxed as ordinary income. Logic also says capital losses should be deductible.)
But this is just the beginning. We need to dramatically simplify the Tax Code before it collapses under its own weight. In yet another TIGTA report, they noted:
In the area of reducing fraudulent claims and improper payments, TIGTA noted that it believes that the IRS is significantly understating its estimate of improper payments associated with refundable tax credits in its reports to OMB and Congress. The IRS estimates that nearly 33% ($8.7 billion) of the additional child tax credit payments made during tax year 2009 through 2011 were likely improper and that over 31% ($5.3 billion) of American opportunity tax credit payments made during 2012 were likely improper.
How many more of these reports do we need to read before it sinks in the system is falling apart at the seams. I shudder at the thought of what will happen is a "wealth tax" is superimposed over this mess.
Posted by: Dale Spradling | Oct 21, 2019 7:22:02 AM
Dale, you write that "capital losses should be deductible". No argument here, but they already are (and whatever can't be claimed on the current year's return can be carried forward forever until it too is used up).
Yes, there are improper payments such as the ones you mentioned. But they don't come anywhere near the hundreds of billions lost to the Treasury by self-reporting: no verification of income, just what the taxpayer reports. And those self-reporters under-report their incomes by nearly two-thirds.
Yes, I imagine we're on opposite sides of the political spectrum. Not a problem as far as I'm concerned. :)
Posted by: Gerald Scorse | Oct 23, 2019 9:01:38 AM
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