September 9, 2015

Jeb Bush's tax plan - less complex complexity

Jeb Bush has proposed a tax plan that reduces taxes.  For that he deserves our applause.  The problem is that he also claims to have simplified it, but that's followed by a bunch of tweaks and reductions of deductions. That's not simpler, it's just different.
We will cut individual rates from seven brackets to three: 28%, 25% and 10%. At 28%, the highest tax bracket would return to where it was when President Ronald Reagan signed into law his monumental and successful 1986 tax reform.
That's a good start. But then,
The plan nearly doubles the standard deduction now taken by roughly two-thirds of all filers. It eliminates the marriage penalty, expands the Earned Income Tax Credit, ends the death tax, retires the Alternative Minimum Tax and ends the employee’s share of the Social Security tax on earnings for workers older than 67.
...and so it goes;
We will retain the deductibility of charitable contributions but cap the deductions used by the wealthy and Washington special interests, enabling tax-rate cuts across the board for everyone. And while we’re doing that, we will treat all noninvestment income the same, so unless you stake capital in an investment, you won’t be able to claim the capital-gains tax rate on your market gains.
Even when he's making a good point,
To stop American companies from moving out of the country, I will cut the corporate tax rate from 35%—the highest in the industrial world—to 20%, which is five percentage points below China’s.
he seemingly can't help but make it complicated.
We will end the practice of world-wide taxation on U.S. businesses, ...we will assess a one-time tax of 8.75%, payable over 10 years, on the more than $2 trillion in corporate profits sitting overseas.

We will also allow businesses to fully and immediately deduct new capital investments—a critical step to increase worker productivity and wages. To pay for this, we will eliminate most corporate tax deductions—which is where favor-seeking and lobbying are most common—and remove the deduction for borrowing costs. That deduction encourages business models dependent on heavy debt.
That's not going to gain him a lead in the polls.
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