First let me say, contrarianism is one of my favorite personality traits, especially when you’re being contrarian to your own base or fans. It’s what I like about Chris Christie, Dick Cheney, Howard Stern, and…Charlie Sheen. When you have no regard as to whether anyone agrees with you (or even likes you) I trust you mean what you say.
And I have to say…I’m starting to like Jon Huntsman. Whether he’s talking about civil unions (which I agree with him on) … or climate change (which I don’t agree with him on, at least on the surface) … he doesn’t seem overly concerned with being popular. And he’s done it again with his tax reform plan.
Everyone gives lip service to reforming the tax code. Everyone says they want to simplify the tax code. Everyone says they want to do away with the ‘loopholes’. And everyone understands this would have enormous economic benefits.
But no one really wants to get into what they mean by “loopholes.”
Forget all the talk about corporate jet loopholes and the like. If you want to flatten the tax brackets and simplify the tax code without crushing the deficit – corporate jet talk is just nonsense. Real tax expenditures (aka – loopholes) are things that we all probably like.
Check out this list from The Congressional Joint Committee on Taxation of the largest tax expenditures over the next half decade. (via Nicole Gelinas on NRO)
- Tax exclusion for employer contributions to health insurance: $659.4 billion
- Deduction for mortgage interest on owner-occupied houses: $484.1 billion
- Lower tax rates for dividends and long-term capital gains: $402.9 billion
- Tax exclusion of pension contributions (defined-benefit): $303.2 billion
- Earned income tax credit: $268.8 billion
- State and local tax deductions: $237.3 billion
- Exclusion of pension contributions, 401(k)-style: $212.2 billion
- Exclusion of capital gains at death: $194 billion
- Charitable deductions: $182.4 billion
- Untaxed Social Security and railroad retirement benefits: $173 billion
The point I’m making here is: you can’t meaningfully preach simplifying the tax code and getting rid of loopholes unless you’re willing to touch some loopholes that people really like. Liberal people…conservative people…all people.
That doesn’t seem to bother Jon Huntsman. As Meredith posted earlier, he’s proposed getting rid of ALL loopholes (including the popular mortgage interest deduction, child tax credit, and deduction for employer contributions to health insurance) in exchange for three tax brackets, the highest being 23%.
This is the kind of tax reform we should be talking about. And Huntman is brave to start the discussion.