Home > conservative, economics > Closing tax loopholes and lowering tax rates: Finally

Closing tax loopholes and lowering tax rates: Finally

Hopefully the next subsidy to die.

The Republicans signaled last week that they were serious about the deficit.  By voting to get rid of ethanol subsidies, which were nothing a gift to corn growers in the heartland, the GOP seems to be stepping up to the plate.  Now, as Paul Ryan promised, they’re moving to reform the tax code, by moving to close tax loopholes that have allowed corporations like GE to pay no taxes.  At the same time, they’re talking about lowering tax rates across the board.  The end result: increasing revenue without raising taxes.  It’s not some genius concept; it’s common sense that was lost long ago with the advent of our increasingly absurd tax code.

The combination of our stupid tax code and subsidies, has created a corporate welfare state that results in market manipulation.  Subsidies of every conceivable kind should be done away with…from oil to solar to agriculture.  No more favors.  If nobody wants to buy a $43,000 Chevy Volt because of its price tag, so be it.

And the tax code?  Burn it.  Give us simple, low rates with no deductions.  All deductions are is a way for the government to play social engineer anyway.  And no, I don’t advocate for a flat tax.  It hurts those who are at the bottom of the pay scale far more than those at the top.  Two or three low, graduated rates would do just fine…but everybody has to pay in.  No more of this “47% of Americans don’t pay any income tax.”

All of this begs the question though: will the Dems go along with it?  They signed onto the ethanol vote because it was strictly a regional issue that few on the left cared about (they don’t care about “fly-over country” after all).  What about ending subsidies for solar, wind, or electric car battery manufacturers though?  I’m guessing we’ll see a much stronger push-back on those.

Of course, none of this makes any real difference if we don’t do something about the entitlements.  Social Security, Medicare and Medicaid continue to absorb every dime of revenue coming into the federal government.  All three of them are essentially ponzi schemes…requiring this generation to pay for the last.  And in the end, ponzi schemes always collapse.

In any event, I’m feeling somewhat optimistic about all of this.  These are the sorts of things we voted for in 2010; and the sorts of things that the GOP failed miserably to accomplish under Bush Jr.  By ending subsidies, we’re automatically decreasing government spending, while at the same time, putting an end to market manipulation.  The government shouldn’t have any involvement in picking winners and losers.  By streamlining the tax code and getting rid of loop holes and unnecessary tax breaks, we will decrease the small businessman’s tax burden, while making GE pay its fair share.  Wow, that almost sounded liberal.  Don’t worry though.  I’m sure we’ll still disagree on what constitutes “fair.”

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