- Raising the retirement age, though not drastically.
- Reducing income tax rates rather substantially.
- Eliminating income tax deductions, including the mortgage interest deduction and the charitable donation deduction.
First, on raising the retirement age. People live longer, healthier lives than they did before. Why shouldn't they work longer? Work is good. Work is fulfilling. It can even be fun. It beats watching Judge Judy. Let's put America's seniors to work! And we say that as a junior senior.
Second, on reducing income tax rates, hallelujah! Let's stop punishing productivity. Call this "making work pay." Oh, that name was taken already. So let's try, "It's your money, actually."
Third, on eliminating deductions, we will surprise some gentle readers by saying, This is a great thing for housing, philanthropy, education and other areas of the economy presently subsidized by tax deductions. This means moving toward letting markets set values, not tax policy. And while this threatens on the edges some of what Americans hold, it's for the good of all those things.
So, over time I [not the SWNIDish we, for we speak of the hypothetical American taxpayer in the first person] no longer get a tax deduction for my mortgage. That means I buy a more modest house and aim to pay it off more quickly. I no longer fret over how I'll lower my taxes as I amortize my mortgage. It's strictly a matter of economic consideration unencumbered by tax implications.
And over time, I give donations to those doers of good who in my view merit support. Never again will I decide to donate a sum primarily to lower my taxes, and then conduct a forced search for someplace nonprofit to park my swag away from the tax man.
Same goes for education. Presently families get a tax break for college tuition. So what they can afford goes up, and institutions raise their rates to reflect that ability to pay. Phase that out and consumers of education will choose cheaper alternatives, forcing institutions to find economies and bringing efficiency to the educational marketplace.
Note well that this proposal runs counter to what one might expect from a mortgage-paying minister-cum-professor/dean. But we believe the following truths to be nearly self-evident:
- that the benefits of owning a house are independent of the tax deduction
- that most charitable donations are given not for the tax deduction but for the perceived value of the charity
- that the best students find a way to finance their education regardless of the tax system
And if no one ever again had an incentive to create a fake church as a tax dodge, the world will have taken a small step toward sanity.
But here's the political reality: both parties will have to knock it off if they want to do something like this. We actually think it'll be hardest for Ds, who even in their most conservative moments believe that tax policy must be targeted at social engineering.
Let's join in a big "phooey" on that. Democrats, let the people decide! It's their money, actually.