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The 96% (Original Post) Scuba Feb 2013 OP
The problem with credits and deductions FreeJoe Feb 2013 #1

FreeJoe

(1,039 posts)
1. The problem with credits and deductions
Wed Feb 20, 2013, 09:26 PM
Feb 2013

A great many that benefit from these programs don't see them as social programs. I think that is a problem with the way that we handle these things. Things like the mortgage interest deduction shouldn't be tax deductions. If we want to reward home ownership, make it a direct payment. You can keep all the same formulas for calculating it, but send the recipient a "mortgage interest subsidy" check.

Of course, if you tried to pass a social program that primarily benefits the upper middle class and the rich by sending them checks for paying mortgage interest, you'd get laughed out of congress. If people saw some of these things for what they really are, they would never go for them. Can you imagine Grover Norquists reaction if you proposed raising taxes to pay for a housing subsidy? Instead, they rephrase it as a tax deduction and suddenly all the tax cutters love the idea.

The tax code should be simple. That doesn't mean it should be flat. That just means that it should be simple...no deductions other than legitimate expenses incurred as the cost of earning income. No charitable deductions. No mortgage interest deduction. None of that. Those programs should live and die on their own as payments made out of the treasury so that they accurately show up on the spending side of the ledger.

OK. I'll get off my soapbox now.

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