Saturday, May 28, 2011

Thanks, Grover

Amplify’d from www.huffingtonpost.com
Thanks, Grover

If you want to understand the wide gulf between Republicans and Democrats, it comes down to tax expenditures. Tax expenditures are what the common folk might call tax deductions. They are legal deductions that corporations and individuals use to reduce their tax load; seems fair. Well, those tax expenditures amount to $1.1 trillion a year! In some cases, tax expenditures are in the tax code because lobbyists made deals with politicians. In most cases, tax expenditures are in place because at a historical point in time Congress wanted to encourage a sector of the economy (e.g., drill for oil, build homes, buy trucks). The question Congress should now be asking is whether all of those expenditures are as important today, as they were 10 to 40 years ago when they were put in the tax code? The Simpson-Bowles Report answered that question: We do not need many of them anymore. However, Congress cannot ask that question.

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