Facts not Fiction
Tax policy is never easy and no matter what, it will have political undertones and any changes in the Tax Code will have a ripple effect in both expected and unexpected places. I was practicing in 1986 when the “Tax Simplification Act” was passed. We, as tax professionals, jokingly called it the Tax Practioners’ Retirement Act, not because it was going to put us out of business; but rather because it was going to fund our retirements. Thirty years later I am still here and many of the provisions implemented with that Tax Act, are the cause of your personal tax headaches.
The US Tax Code is used to encourage behavior for many things we see as “American.” For example, mortgage interest and property taxes are there to encourage home ownership, a long held American value. If these deductions go away it will be more expensive to own a home, fewer people will be able to buy a home and based upon the rules of supply and demand, the value of your home will decrease because there are fewer buyers for your house. Most provisions in the Tax Code, as they relate to individual taxes, have an underlying purpose of encouraging behavior. Business tax laws are different, while they have many provisions to encourage behavior ( for example depreciation expense is there to encourage investment in capital assets); many of the business tax provisions are the result of special interest group lobbying. Sadly these groups are still extremely powerful and I would be surprised to see changes to many of the special interest group’s “babies.”
What I encourage people to do is to NOT believe the social media sites and to look beyond the headlines in the news. Remember headlines are there to entice you to purchase the media or read the article, they are often as misleading as commercial advertising. There is a saying that whenever you see a policy titled “Affordable” or “Simplification” you should look beyond the title and assume it may be smoke and mirrors!
Below is a list of some of the websites that will be more Fact than Fiction. As I find reliable sources for information on the proposed changes, I will add them to this list.
Tax Foundation – Independent Tax Policy Nonprofit
Tax Policy Center – Urban Institute and Brookings Institution
Forbes Contributor Tony Nitti :