Reply to Romney on Meet the Press

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[quote=Anonymous][quote=Anonymous]Aside from refusing to name any of the loopholes he plans to close to assure that the rich don't pay less taxes despite the rate decrease he promises, the part of the interview that most impressed me was his claim that his replacement for Obamacare will keep all the good stuff but drop the mandate that makes the numbers work.  He seems truly averse to arithmetic.

On that loophole issue, even if I believed that he has a secret list that would do all he claims, I know enough about Congress to know that they would pass a bill cutting the rates while closing the loopholes would get tied up in negotiations and die without ever getting to the floor.[/quote]

True "loopholes" are few and far between. Carried interest is one, and requiring it to be taxed as ordinary, rather than capital, is the right thing to do as a matter of fairness, but it won't come close to solving the budget problem.

A lot of politicians equate "loopholes" with "tax expenditures," which is actually a real term. The problem is that the biggest tax expenditures are actually deliberately-set (and popular) policy, not "loopholes."

For example:

-- Mortgage interest deduction is a "loophole." This isn't to say that policy isn't worthy of reexamination, but it isn't a "loophole."
-- The tax-free exclusion of employer-paid health benefits is the biggest expenditure. Sound like a loophole to you? Also, we had that fight already, remember?
-- On the corporate side, there is an expenditure that allows domestic manufacturers to tax deductions worth about 3 percentage points, making their tax rate more like 32% rather than 35%. This is the so-called "199 deduction." It's probably one of the "loopholes" Mitt "Believe in America but Invest Elsewhere" Romney would repeal.
-- Another major corporate tax "loophole" is the research and exeperimentation credit. We could repeal that but arguably more companies would just move their discovery operations to Ireland or something. So, that's a policy question, not closing a "loophole."

This isn't 1986, where the code was riddled with them. Any politician who speaks vaguely of getting rid of loopholes (Obama is guilty of this too, although he has offered more specifics of what he means) is lying to you.[/quote]

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