Tuesday, November 20, 2012

Tax loopholes alone can't solve fiscal cliff - Lauren French - POLITICO.com

Here is an interesting post that shows the gravity of the fiscal cliff we're about to fall down.

Raise revenues and reform the Tax Code? Easy — just eliminate all the tax loopholes, right?

Good luck with that.

“Eliminating loopholes” sounds a lot better than “raising rates”: The tax rate is what I pay, and a loophole is what the other guy gets.

But the biggest loopholes in the U.S. Tax Code — generally referred to as tax expenditures — aren’t just the tricks of the trade for millionaires with offshore bank accounts. For the vast majority of Americans, they’re just how things work: You don’t pay taxes on your health insurance or Medicare benefits; you contribute tax-free to your 401(k); and your mortgage interest pushes down your tax bill each year.

And even if you dump the biggest of the set, these tax perks don’t even come close to closing the deficit. At best, the top 10 would pull in an extra $834 billion a year, according to Joint Committee on Taxation figures. Considering the hole lawmakers are trying to fill is several trillion dollars large, it’s clear they wouldn’t even come close.

Here are the 10 biggest tax loopholes — and the reasons why most of them will survive the fiscal cliff.

Read more: http://www.politico.com/news/stories/1112/84065.html#ixzz2CmkrHiNc

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  1. Great post. I was doing research on IRS tax help when I came across this post. I am glad I did because this is a very interesting read. Thanks so much for sharing Greg.

    1. Not a problem, thanks for stopping by, Lauren.