Tax reForms

"The greatest good for the greatest number."

The Trump administration's new tax system revamping has been unveiled. Although lacking in critical details ... probably on purpose ... it nonetheless is causing considerable dyspepsia. In particular the proposed removal of state/local tax deductions and the reduction in the highest rate are the center of most complaints ... see: NY Times Article

Trump's financial guru Gary Cohn was explaining this administration's new tax reform proposal to the media recently and I was struck by one of his comments. The press asked him its standing question, "Can you guarantee that under this new plan no middle class American will end up paying more taxes?"  Cohn, to his credit, said no ... there were no such guarantees. Some bizarre set of financial circumstances might cause someone to pay more, but the vast majority of  middle-income Americans will end up with more money in ther pockets. And the top 1% would likely be paying more.

However, color me skeptical. Somehow it is difficult to imagine that two Goldman Sachs alums (Cohn and Mnuchin) would so help out middle America without cutting generous vig for their old bosses ... perhaps by the killing of the Alternative Minimum Tax (AMT). Actually, I have in the past suggested a variant of an AMT in which all deductions could only reduce the effective tax rate by a few percentage points. This way Congress would not have to pick winners and losers among the current litany of popular deductions.

For me, the acid test of this new tax reform will be if it scuttles the unfair "carried interest" tax rate that has made so many hedge fund managers multi-billionaires. If it stays, then Wall Street Titans are once again pretending to be altruistic while buying their many Hamptons' mansions.

The Upcoming Debates -- Romney

In the upcoming debates, there are ten questions I would like to be asked of Mitt Romney:

1) You took no salary when you ran the 2002 Winter Olympics, nor when you were the governor of Massachusetts. If elected, would you take your $400,000 Presidential salary?

2) Do you believe that private-equity and hedge fund managers should continue to pay income taxes at the 15% “carried interest” rate?

3) Why do Mormons not permit non-Mormons to enter their temples? Do you agree with this restriction?

4) You have been castigated for not releasing 10 years of your tax returns instead of just the 2 years you have disclosed. Have you, in fact, paid considerable federal taxes during each of those missing 8 years?

5) It has been reported that you have off-shore bank accounts in the Bahamas, or Switzerland, or other locales. If this is or was the case, what was their purpose … and have you disclosed these accounts to the IRS?

6) What specific proposals do you have for reforming the U.S .income tax system?

7) What specific proposals do you have for reforming the U.S. federal entitlement programs?

8) Where would you pare back spending in the discretionary portion of the federal budget … and is the Defense Department one of them?

9) What specific regulatory burdens would you focus on removing in order to get Americans back to work?

10) What would your top foreign policy objectives be in the early years of your administration?