I had read nothing besides your description.


送交者: psycho 于 2005-10-23, 12:14:24:

回答: Let's get the facts straight 由 吴礼 于 2005-10-23, 11:07:15:

But based on what you said, the tax-reform is not very good yet not very bad either:

1) it ends the distortion against renting. Usually renters are either young people without family or those too poor or with too unstable employment to afford a house (i.e. those unlikely to pay tax). So this policy benefits young/single professional renter (middle to upper middle class). This might be helpful in deflating the housing bubble.

2) very rich people usually don't buy houses with mortage. So this policy hurts upper middle class homeowner more than middle income homeowners. Effect on superrich neutral.

3)again AMT now affects around 14-16% of the people with income between 75k-200k, which is middle class and lower-upper-middle class (like Orwell discribed himself)--see the link below. And about 34% of upper middle class (200k-500k) is affected. Have some problem (because the trend) but not a very serious one (I guess most people here belongs to the 100k-200k, so don't panic. Even if you have income of about 300k, you are less likely to be subject to probability of 34%, as this probability increases with income level). And this effect came from the characteristic that AMT deduction is not adjustable with inflation. So to fix it is easy: make it adjustable because if it's repealed once for all, the super-rich is the biggest beneficiaries. So AMT part sounds fishy here. Of course, I can not comment more as I don't know what they fix AMT in this reform. But if they are really advising to repeal it, this is like making the mass angry and then exploit it.

4) revenue neutral tax reform, hence did nothign in soothiing the deficit--which is caused by the almost simultanous introduction of 2 wars and lavish tax cut for the rich.

In short, if they are not trying to do something big in AMT, this is an attempt to make the tax code more elegant, and there might be (depends on the magnitude of the AMT reform--benefiting the upper middle class--and the mortgage deduction--benefitting the lower middle class homeowner who just reached the threshold of paying tax) a small egalitarian redistribution effect on it--from the upper middle class/middle class (most forumers) to the lower middle class. This is the most benevolent form I can imagine. Or might be the opposite.



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