13 April 2011

My e-mail to the authors of the IPS report on revenue

Farflung correspondents,

I sent this to one of the authors of the Institute for Policy Studies Report on the need for Revenue Reform previously discussed. Here.

Mr. Collins:

I heard your co-author Scott Klinger being interviewed by Ian Masters on Background Briefing (KPFK-FM Los Angeles, ianmasters.com), and immediately went to this report. I admire its succinct and direct argument.

I have several times had arguments with friends about the wisdom of a financial speculation transaction tax. I was surprised by the magnitude of your estimate on this tax, but I thought your idea of exempting small investors was a good one. I truly believe that the kind of rapid speculative trading that has become de riguer on Wall Street amounts to parasitism, so I applaud this concept.

I imagine that you considered carefully what would have the greatest revenue side positive impact without harming the interests of middle class and working people, but it occurred to me that there were at least two areas of revenue enhancement that might have well been included:
  • Raising or even eliminating entirely the income caps on Payroll Taxes, without changing the income limitations on benefits
  • Limiting the mortgage interest deduction to one house or condo, and to a fixed interest amount that would be roughly commensurate with the interest on a recently purchased home affordable in one of the higher price zones by a family or individual with less than $200,000 income (however that might be best formulated). (Anyone who can afford more than that should not be subsidized).
I would also like to see an "infinitely progressive" scheme, rather than brackets; i.e., a curve that would be applied to income (past a threshold) to determine tax rates. In this computer age, the arithmetic simplification tool of "tax brackets" is unnecessary.

But more importantly, I think that taxes even on more moderately well off people, say, >$80,000 for individuals and>$160,000 for couples, needs to be increased; modestly in the lower end, and as you get closer to the threshold you mention, at a rate that smoothly transitions to the new higher taxes you are proposing.

Right now, it is probably politically infeasible to enact tax significant tax increases, but we need to keep pushing the idea, until people like the protesting teachers and fire fighters in Wisconsin and Ohio, and others who are naturally sympathetic to them, start to understand that the "Cut taxes" mantra of the Republicans since Reagan at least has actually decimated our country, and we want the nation ready and able to help minimize gross economic inequality and make public investments for prosperity of all the people back.

Thank you.

David Studhalter

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