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A Call for Family Friendly Tax Reform

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nickshepDEM Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-12-05 12:28 PM
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A Call for Family Friendly Tax Reform
WASHINGTON, D.C. -- A progressive tax reform plan that will provide $436 billion in new net tax relief to middle-class families and make the tax code work for ordinary Americans was released today by the Progressive Policy Institute (PPI). In Family Friendly Tax Reform, PPI senior fellow Paul Weinstein Jr. offers a bold set of four "family friendly" incentives and pays for his ambitious reform agenda by closing 68 corporate loop-holes and unnecessary tax breaks.

As Americans file their 2004 income taxes, they are increasingly frustrated with the complexity of the U.S. tax code. Last year alone, Congress and the Bush administration added 10,000 pages of new tax breaks, riddling the system with loopholes and making taxes more complicated and less progressive. Weinstein argues that the current system's bias in favor of wealth and privilege over work and fairness gives progressives a golden political opening: champion a bold set of reforms to tip the scales back in the other direction and harness the tax code as an instrument to expand middle-class opportunity.

In this innovative report, Weinstein offers a reform plan that simplifies the tax code and provides expanded incentives to help families pay for college, buy a first home, raise their children and save for retirement. These incentives would be easily understandable, available to the vast majority of tax payers, and consistent with the values of work and family. Finally, Weinstein's plan is budget neutral and would not add one dime to our nation's burgeoning debt.

Weinstein proposes four "above-the-line" tax incentives designed to encourage the most basic aspirations of families trying to live the American dream, including:

* A College Tax Credit: A $3,000-a-year credit to students for four years of college and two years of graduate school -- enough to pay for almost all of the average annual tuition at public universities.

* A Home Mortgage Deduction for Everyone: A home mortgage deduction available to non-itemizers that would enable an additional 10 million Americans to take advantage of this incentive, increasing homeownership while reducing the number of Americans who must file the more difficult 1040 tax form.

* A Family Tax Credit: A single family tax credit, replacing three complicated tax incentives to provide greater benefits to more families than all the existing credits combined.

* A Universal Pension: A Universal Pension (UP) that would replace 16 existing IRA-type accounts with one portable retirement account for all workers. It would provide a $500 stake and tax-deferred saving, and workers could roll their 401(k) plans into their UP when they change jobs. A UP system could also offer a progressive alternative to President Bush's plan for partial privatization of Social Security.

"For too long, progressives have sat on the sidelines defending the status quo," Weinstein argues. "It is time for a new generation of progressives to pick up the mantle of tax reform and make it a leading part of the progressive agenda. Americans deserve a tax code that reflects their values and aspirations."
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dcfirefighter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-12-05 12:59 PM
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1. I am agaisnt a home mortgage deduction
Reducing taxes on those who own homes implicity raises taxes on those who don't.

Which is counterproductive to the effort to get people to own homes, or even rent one.

There should be a universal housing credit, rather than a deduction so those who own homes can pay less than those who, born later, or whatever the reason, enter the housing market later, can have a fair shot at a limited resource, such as land. When you buy a house, 30-40% of the value is the site value of the property. Land, they ain't making any more of it.
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nickshepDEM Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Apr-12-05 01:58 PM
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2. kick
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