GOOD News About TAXES?

Recommendations for a 5% income tax plan are being carefully evaluated. They say that there will be some people who pay a bit more and some who pay a bit less. Rep. John Dougall anticipates a single bill which includes the income tax and the food tax changes. Most agree that the state and local tax should be removed from food. But the two reforms go hand in hand. I think it would be awesome to eliminate some tax and give the consumer an advantage in spending power but I also fear the effects of what will happen to our income taxes. I don't have a full understanding of what it all means. Maybe somebody could help me out......?

1 comment:

Dr. Tufte said...

Economically this is a sensible proposition.

However, in Utah, this has been killed by the LDS Church. The church made an official statement to the legislature that they did not approve of elimination of the deduction for charitable contributions.

They are not by any means the first group in the world to make this sort of claim, but again, it isn't economically or even socially sound. The reason is that this deduction says that if you earn income and use it to feed your own kids, you should pay 5% tax on it, but if you earn it, and use the money to feed someone else's kids you pay 0% tax on it. Carried to its logical extreme, this is advocating that everyone should feed their neighbors kids. It's nonsense, and we ought to know better.

Please note that I'm picking on the LDS church because we live in Utah - inability to see through claims like this that are made by charitable organizations of all colors and stripes is a major problem in tax reform nationwide.