Jewish World Review Nov. 30, 2012/ 16 Kislev, 5773
Over the Fiscal Cliff
By Paul Greenberg
Election, shmelection. When it comes to keeping the enterprise known as
This now annual showdown might as well be one of those daily re-enactments of the Gunfight at the OK Corral staged to entertain the tourists, and it's getting just as old. Even as the advance billing gets more and more shrill: The End is Near! Bush Tax Cuts Threatened! Automatic Tax Hikes Ahead! All is almost lost! Who will blink first? Stay tuned -- and very nervous.
This recurring crisis has grown familiar, like a melodrama with daily matinees and immediate seating. The president says the government needs more revenue to balance its books, while the loyal opposition says the country doesn't need even higher tax rates. Especially on capital that could otherwise get this stalled economy moving. Welcome to Impasse City.
Both sides are right. So why not find a way to compromise, a way to assure more tax revenue but not raise tax rates all across the board?
Here's how to do it: The voluminous U.S. tax code, perhaps the most indecipherable document since the Book of Revelation, is stuffed with special exemptions, deductions and tax breaks for just about every special interest with friends in
Ah, but which exemptions and deductions should be eliminated? And which should be saved? Everybody seems to have his own list of both favorites and expendables. So does every vested economic interest with its own lobby, trade association or foundation.
That's the problem
Put a cap on the amount of exemptions and deductions any taxpayer can claim, and let the taxpayer himself choose which ones he'd give up.
Want to forgo the tax deduction for the interest paid on your mansion's mortgage, but keep the one on your gifts to charities? Fine. Or vice versa. So long as you stay within your limit of deductions and exemptions. The choice is yours.
But would limiting tax breaks really provide enough additional revenue to reduce the federal government's increasingly unmanageable deficits? It all depends on how much of a tax break you'd allow each taxpayer to keep.
Capping all itemized deductions at
Lowering that cap on such tax breaks to
That holds true even if income tax rates were cut by 20 percent and the dreaded Alternative Minimum Tax eliminated. The AMT becomes a greater and greater drain on the country's middle class as the value of the dollar shrinks and tax-paying Americans find themselves in ever higher income brackets. The thing needed killing years ago.
Note that all these revenue estimates come not from the
Problem solved. Or would be if the more partisan pols in
The biggest obstacle to such an approach may be the president's attachment to class warfare. He seems fixated on raising tax rates for those Americans making more than
If only our president would lay aside his my-way-or-no-way pride at this critical juncture,
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