What Changes To Expect On Taxes – “More Chips for Tax Reform” by Steve Rattner

by gradycarter

More Chips for Tax Reform.

I am tempted to write a lot about this article, but I’m going to limit myself. I appreciate that this column addresses that there are many sides of taxation. The biggest debate between Republicans and Democrats on revenue (tax money) increases to close the deficit/debt is whether we should raise rates (possibly not addressing loopholes), or only closing loopholes and not changing any rates. And the battle over the rates is a battle over the rates of a very small portion of people . The Republicans have been suggesting closing tax loopholes to raise revenue, but my biggest question is which loopholes they would close and who would be affected. The Democrats have mostly been suggesting a raise in rates because they don’t think that closing loopholes in our dysfunctional congress is very feasible. I tend to be very skeptical that closing loopholes alone would raise the levels of revenue (probably around 1.2 trillion dollars) that we would necessarily need.

I was very glad to hear Mr. Rattner highlight a few of the main loopholes that have caused room for debate on tax fairness for the extraordinarily wealthy: capital gains/dividends, and the carried interest loophole. I posted the other day about Obama’s Tax Plan (via Steve Rattner) and here is an image to visualize that a little bit before you read the article:

I hope you enjoy the article.

-Grady

More Chips For Tax Reform