Newspaper article The Florida Times Union

Opinion Roundup; Taxes and Solar Energy Tax Reform Remains a Major Priority

Newspaper article The Florida Times Union

Opinion Roundup; Taxes and Solar Energy Tax Reform Remains a Major Priority

Article excerpt

America's tax system is a mess, a Rube Goldberg contraption that hurts the economy.

Our tax system provides incentives for companies to move headquarters and their capital out of the U.S.

And still, Congress has been incapable of reforming it. The last major reform came during those halcyon bipartisan days of the 1980s.

The 1986 reform effort took two years but with the current attention deficit of the Trump administration that seems like an eternity.

As with any major piece of legislation, there must be trade-offs.

The major danger is that Republicans get their tax cuts and Democrats get their programs and the nation's debt load skyrockets.

As interest rates begin to rise - they can't stay near zero forever - the impact on the debt will be substantial.

Net interest payments on the nation's debt rose $7 billion in March, up 30 percent from the previous year.

While the debt surged during the Obama presidency, the public was spared from the impact by the bubble of the Federal Reserve's low interest rates.

So that's the first major trade-off. We can't have our cake and eat it, too. If income is going to be reduced, programs must, too.

At the last major tax cut in 2003, the national debt was 33 percent of economic output. Today it's 76 percent, reports The New York Times.

Trump's tax plan released during the presidential campaign would have increased the annual deficit.

The second trade-off involves tax cuts that spur the economy and others that produce more revenue to people but have less economic impact.

Tax cuts that lead to jobs ought to be encouraged.

The American tax system currently favors debt but with the nation strangling on government and student loan debt, that cannot last.

A tax cut that encourages saving ought to be encouraged. Republican proposals to provide tax credits for health savings accounts could help restrain health spending growth as well.

Fred Barnes, executive editor of The Weekly Standard, wrote that tax reform should have these three traits:

- Simplicity in order to gain popularity.

- A cut in corporate tax rates, currently 35 percent to about 20 percent.

- An incentive to bring back overseas profits and use this income to pay for new roads, bridges and other infrastructure.

In order to gain passage, this plan would avoid controversy.

For instance, the border adjustment tax has produced strong opposition from retailers like Walmart that would be taxed for products made overseas. And various tax preferences may be inefficient but they are supported by powerful interest groups that would have an incentive to kill the broader bill.

One idea that is gaining steam is a revenue-neutral carbon tax. In return for a tax on carbon, consumers would receive a check or a reduction in payroll taxes. …

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