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One More Time on Taxes - a Summary
In a recent thread on the Republican tax cut proposal for Kansas some confusion seems to have arisen as to my position as reflected in my many blog posts on taxes. I will attempt to clarify.
For the record, I do not support what Mr. Brownback is doing and I actually testified in opposition a few years ago. This approach is a continuing Republican canard. That said, I automatically attack what I consider hyperbole. The Kansas budget just passed actually contains increases for social services (see Ms Francisco report to her constituents). The problem is in the out years. A rational response is to make sure there are no out years for this tax profile. Yelping about devastating consequences before they come to pass or are unavoidable just aggravates me - personal belief. Since there is little likelihood the composition of the legislature will change significantly in the next year it would seem prudent to not unduly disparage those whose help we will need to fix it all next session.
I have been a strong proponent of a progressive tax system in this forum. I have been critical of a distorted tax system where about half the people pay the vast majority of the federal bill. The inexcusable tax policy for the really rich that leads to a lower proportional tax then people earning one tenth their income sickens me. I believe all should pay something based on ability to pay. I am a student of human nature. People like pleasure and avoid pain. Taxes for most people are pain. If too many people can have pleasure without pain (more government support while paying no taxes) they will do so until the fewer and fewer people paying for all of this revolt or leave.
I am completely floored by recent attacks singling out seniors as receiving inappropriate tax credits/deduction. The data in the recently referenced study: http://www.urban.org/uploadedpdf/1001... clearly reflects that the credit/deductions causing so many to owe no federal income tax overwhelming go to the poor and near poor (to include seniors). The issue is income not age. Now I am on record as favoring the elimination of all deductions and credits so that the tax system is used only to obtain revenue. If we want to provide assistance to seniors, parents, single moms or for that matter cows the expense should be on budget. So I agree with the urban institute’s study ideas of ending these credits/deductions – all of them.
Now as for Social Security it is clear that some of you apparently have a fundamental disagreement with me as to what it is. I believe it is a well intentioned government program that forces people to save money in return for a retirement annuity. The government treats the return from that annuity differently depending on whether it is derived from money paid into the program or from an implied return on that money. The latter is taxed while the former was taxed before it was taken. Some of you seem to be advocating taxing the former twice (as the urban institute study seems to do) while redefining social security as government largess and all payments made into the program as simply another form of income tax??