It's tax time! I hope everyone's sending out their tax cards and humming a tax carol as they go about their business. For the first time in I don't know how many years it looks as though Kris and I will get a refund this year. Part of that comes from my having turned sixty-five, allowing me to bump up our standard deduction from $12400 to $13600. Whoopie. Another of the benefits almost without number we Americans get as we become living fossils.
My conservative friends preach tax cuts as a panacea for all that ails the American economy, but all their tax slashing proposals seem to be heavily weighted towards wealthy people, on the dubious (at best) theory that they will take those tax savings and invest them in new enterprises, thus creating employment for the working class. Empirical evidence suggests this does not happen nearly as much as proponents of these cuts believe.
I'm not against tax cuts, especially if they reduce my own personal tax bill. Since I prefer the concept of trickle up economics, here are a couple of ideas for tax reforms that would help people of modest means.
Social Security payments to older persons, or people whose spouses have died and who are raising children by themselves, are taxable except for those who are truly impoverished. Making those payouts non-taxable would put extra money into the hands of the people who are most likely to spend it, thereby relieving them of economic stress and stimulating the economy.
As mentioned, I as a certified oldster can now claim another $1200 exemption for my wrinkled skin and toothless grin. (Believe me, the toothless thing is real. I just cracked a tooth last night and am afraid the dentist will want to pull it when I see him, as see him I must.) Increasing the amount of that exemption bump would be beneficial for me and millions of others like me.
Those are changes in the tax code that would be applicable mostly to elderly Americans, but this next one would work to the advantage of younger people. Prior to 1982, people who itemized their deductions could write off interest paid on loans other than mortgages. In other words, if a person had to get a car loan, or was paying off credit card debt, the interest would be deductible. Young people who are healthy and who have just bought a house find it makes more sense to take the standard deduction than itemize, even though they are struggling to make those house payments. Medical expenses can only be deducted to the extent they total more than 7.5% of the taxpayer's adjusted gross income, seldom the case for those who are moderately healthy. So, if interest on auto loans or other indebtedness was restored to the tax code, many more people would be able to itemize and get a larger refund.
(That medical deduction thingee could also be liberalized.)
So, Congressman Lamborn, are you listening? I bet you're not.