SUNDAY FUNNIES

These tax bills sound like a bunch of bullshit. They should have equalized employer-paid and citizen-paid health insurance by making premiums fully deductible (to a limit) and making employer-paid insurance taxable (above that same limit). If they’re going to limit mortgage interest, they should impose a total max deduction, not a max loan amount. They shouldn’t discriminate between primary residence and second home, since people will just play games with that. They shouldn’t make only interest on purchase loans deductible – or people will create work-arounds to buy their homes from themselves. If refinanced loans aren’t deductible to the same degree that purchase loans are (if at all), people will forgo logical refinances. They double the “standard deduction” but eliminate the personal exemptions, so that’s a “wash” solely to create a talking point. They (so far) have left carried interest extremely favored. They’re phasing out the inheritance tax completely – which is unnecessary, given the existing exempted amount (for the vaunted “family farms”) AND the current “step up in basis” allowed under current tax law. They have a new 25% bracket for pass-through entities, which is 1) stupid (will incent more gamesmanship of shifting w2 income to S Corp income) and 2) unnecessary, given that income from pass-throughs already totally avoids corporate tax. If they’re going to get rid of state & local tax deductibility, they should phase it out. And why allow (as the House does) $10,000 in property tax to be deducted (versus NO state income tax)? Answer: because even red states have property taxes.

The whole thing is a clusterfuck and I hope it fails.