Comments on: Fix the Tax Code Friday: Child Related Exemptions and Credits

By: Steve S

Steve S — Mon, 12 May 2008 02:31:15 +0000

Raising children should be a neutral event. There should be no incentive for persons to have children they cannot afford to raise. I am for some tax relief for children in day care but we all know people that abuse the system and claim they are paying their parents or significant other is being paid when in fact they are not. This is just another loop hole to benefit the tax cheater. We still need to abandon the current tax laws in favor of some system that encourages thrift and good stewardship. Many of my friends both poor and wealthy favor a consumption tax. I don’t know if that is the answer but it can’t be worse than the abusive system our government uses to raise capital. Steve S.

By: Death & Taxes

Death & Taxes — Sat, 10 May 2008 13:37:53 +0000

But the ‘86 Code is a perfect example of how money screams. It reduced taxes to two rates, but within two years, big money wanted Capital Gain preferential treatments back and got them, despite the warning of one client of mine, a man who made tons of salary. He said “I like 28%; I wish Bush would stop pushing for capital gains because the Democrats will raise the top rate.”

What happened when 86 passed was that top salaries burgeoned, stock options became rarer and life went on as people found ways to plan…..only when capital gains came back did options really return.

I think it was Moynihan who commented that once you put preferential rates into the Code, there would be a hydraulic effect as planners thought of schemes to take advantage of them.

By: Another Tax Geek

Another Tax Geek — Sat, 10 May 2008 01:21:07 +0000

Actually Kelly, if Congress were to ‘clean up’ the Code, I think it would help a lot. Yes, it would get just as complicated over time, but you have to remember that it’s been over 20 years since the last major rewrite. I was in high school then, but I hear that it was a big improvement. The problem now is that we have 22 years of patches, special interest giveaways, new credits & deductions, etc. layered in on top of the ‘86 Code.

By: Ray Harris

Ray Harris — Fri, 09 May 2008 22:20:39 +0000

The idea of the 16th amendment is just ridiculous in my opinion. The whole mess should be done in ONE sales tax, leave my paycheck and land/property alone ! In this way ALL can pay equally for the American dream. The tax payments I make are so spread out, how is one to know how much is paid ? Which I think is the goal, for us not to know how much we actually pay.

By: Urbie

Urbie — Fri, 09 May 2008 21:36:27 +0000

Hi, Kelly –

I’m not going to get into a big dustup over the fairness or unfairness of child care exemptions and/or credits, or those for mortgage interest, etc. The biggest thing I took away from tax class (on my way to a BS in accounting — with emphasis on the BS!) was that fairness and logic have nothing whatsoever to do with the tax code. The code is all about whatever Congress decided to pass — based on political compromise, special-interest lobbying, pandering to the lowest common denominator of voters’ base desires, and that sort of thing. As noted yesterday, my wife and I have no kids (we also rent our apartment, just for the record) — so our conception of what’s “fair” is going to differ from that of a couple with three kids who own the place (e.g., our landlord and -lady downstairs!).

Basically, at this point, I think anytime Congress, state legislatures, and chief executives make ANY changes to the laws on the books, the result is that things are LESS fair, not more — and they’re more complex. That’s good for tax geeks like Kelly, who get paid big bucks to sort things out, but it’s bad for the average person. Despite having a degree in accounting, I don’t even do my own taxes — that should be a clue that the tax code is too complex (either that or I’m stupid, but let’s assume the former, just for the sake of discussion).

So at this point, I would vote for any candidate who promised to do nothing whatsoever for the duration of his/her term. Don’t make any new laws. Don’t repeal any existing laws. Don’t raise taxes. Don’t lower taxes. Don’t regulate or de-regulate. Just leave things the way they are right now, and we’ll muddle through. But geezus — stop breaking stuff!

By: Kelly

Kelly — Fri, 09 May 2008 20:43:45 +0000

Rick – great point re the complexity of the Code. That’s my biggest beef with the idea of just creating a new tax Code – it would be just as complicated. The reality is that our Congress has made the existing Code as large and interconnected as it is and would do the same to any plan over time.

By: Kelly

Kelly — Fri, 09 May 2008 20:41:19 +0000

Another Tax Geek – limiting the number of deductions and credits… interesting!

By: Rick

Rick — Fri, 09 May 2008 20:27:03 +0000

The tax code is full of all sorts of incentives and oddities. If we want to encourage having kids and having them out of wedlock leave the code as it is. In my book you do away with the statuses you get an exemption for each person you support, you get a standard deduction no matter what, but no MFJ or HH or QW or MFS. Spouse does not work Ok you support that person you get the exemption. Also make the courts issue an 8332 unless the parents are married. The child tax credit people love it and it does help people of lesser means. But lets face it it is goofy, kids going to college whoops no more child tax credit when they are 17 and above. Is that because of the hope credit? The thing is so complecated you can’t change one thing cause it changes others. Good luck.

By: Another Tax Geek

Another Tax Geek — Fri, 09 May 2008 20:01:38 +0000

Having children should definitely be tax neutral, as should most decisions really.
At the very least, the various deductions, credits, etc. available should be limited to say, two per return. Maybe with recapture beginning beyond that.

By: Velveteen Mind - Megan

Velveteen Mind - Megan — Fri, 09 May 2008 13:01:33 +0000

It just occurred to me that it is insane that msnbc was asking a SAHM her opinion about issues relevant to working mothers.

Um, the topic was actually pollsters labeling moms with labels such as “Soccer Mom.”

NBC considering my opinion on working mother issues is like you considering my opinion on taxes.

Trust no one.