With unemployment now at 10.2%, it is imperative that job creation be number one on the President's agenda. That doesn't mean the health care needs to be set aside, as it is one of the most important things to set right if we are to move forward. And I do believe from listening to the President earlier today that he understands this and will be doing everything he can to improve the situation. Infrastructure spending, greening the economy, extending unemployment compensation and job training, increasing the flow of credit to small businesses and community banks - these are all tremendously important, positive steps. But I was also discouraged to hear him mention tax cuts to businesses as another solution.
I am sick to death of politicians, on the right, left, and everywhere in between trying to solve our problems by dicking with the tax code. They see it as a way to influence and shape American life, and all they're doing are making things more and more complicated and unfair. As a CPA, I see the illogic and stupidity every day. All we've succeeded in doing is making the tax code so convoluted that nobody can really follow it. Anybody with more than a W2 has to seek out help. Great for my profession, but not so hot for the American people.
Although campaign finance reform and more competitive elections (more parties, instant runoffs, etc) would go the longest way towards improving our political system, our tax code is another major culprit. Lobbyists swarm Capitol Hill in large part to get the tax code to favor the groups they represent. And more often than not, Congress is happy to oblige.
Does messing with the tax code actually accomplish anything beneficial? Sometimes, maybe. The First Time Homebuyer's Credit may have temporarily stimulated the housing market. But it has done nothing to address the underlying problem - there is a growing mismatch between what people make and how much a home costs. A larger and larger share of income has to go into the purchase of a decent home.
Any tax change that relieves one group may wind up costing another group more money. Unless you're willing to run up large deficits (uhh, well, maybe they are), somebody has to make up for the credit/deduction you've given to someone else. Relieving property tax for a certain class of taxpayer may just raise the rates for another group.
So yes, let's solve the job crisis! But don't waste money on ineffective tax gimmicks. Let's rebuild this country for the future!
It reminds me of the education system. We know there are problems but no one wants to delve in to find/fix the real issues -- just want a "silver bullet" fix.
ReplyDeleteYeah, I have been around educators my whole life (including my father who was a school adminstrator and leading educational figure in the State of Michigan, and my sister who is a research assistant for the Secertary of Education of the State of Michigan).
ReplyDeleteOne of the biggest problems I've seen is what I call the Theory of the Year. They are constantly remaking teaching theory and applications every year or so. So hard working teachers show up at school being told that everything they did last year was wrong and this year they have to learn a whole new approach.
I'm not sure what that has to do with tax policy, but it's my observation about schools.