Which leads to the disincentives proposed by the gang of six in an attempt to move the "debt ceiling" mythology forward (h/t to Ann Barnhard, and IOTW) (from Accounting Today).
- The plan reportedly includes three separate tax rates, one at 8-12 percent, another at 14-22 percent, and a third at 23-29 percent, according to the Associated Press.
- The plan would also reduce tax breaks on mortgage deductions, 401(k) plans and IRAs, charitable deductions, child tax credits and other areas.
- The plan also proposes to close some corporate tax loopholes, lower tax rates for both individuals and businesses, and eliminate the alternative minimum tax.
- It would also cut $500 billion immediately from the deficit, and give Congress an additional six months to come up with other spending reductions.
- we want to discourage home ownership,
- we want to discourage responsible saving for retirement,
- we want to discourage contributing to charity and
- we want to discourage having children.
Note that all of these disincentives have the long term trend to make people more dependent on the government and less self-reliant.
Next, remember a good working definition of "loophole" is "law" when used by someone the writer doesn't like. A "corporate tax loophole" is nothing more than a corporation obeying the written law.
By saying "cut $500 billion immediately from the deficit", they imply that's for 2012, and the deficit will thus be $1.1 billion (as closely as I can track it). That's about number 13 in the ranking of the world's GDP. We're still borrowing more than almost any nation can lend.