Thursday, November 18, 2004

Bush tax overhaul would penalize companies for providing healthcare, benefit investors

The Bush administration is eyeing an overhaul of the tax code that would drastically cut, if not eliminate, taxes on savings and investment, but it is unlikely to try to replace the existing tax code with a single flat income tax rate or a national sales tax, according to several sources familiar with ongoing tax deliberations.
The administration will also push hard for large savings accounts that could shelter thousands of dollars of deposits each year from taxation on investment gains, according to White House economic advisers who have been involved with the planning. And any tax reform, according to Treasury Department officials, would likely eliminate the alternative minimum tax, a parallel income tax designed to ensure that the rich pay income taxes but one that increasingly ensnares the middle class.
The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said.

The elimination of the deduction for state income taxes is pure fuck-the-blue-states retribution -- it will make the biggest difference in places like Califonria and New York. The elimination of the deduction for employer-paid health care is an outrage, and singles out that cost of doing business as categorically worse than such necessary and favored expenses as buying a Hummer. And taking savings and investment out the tax base is a simple way of updating Marie Antoinette: "let the poor pay taxes."


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