When Alexis de Tocqueville wrote of America in the early 19^th century in his classicDemocracy in America, he was comparing America’s democracy to the declining norm in Europe: aristocracy.

tips to Bruce Tuchman

“Israel (its medical technology) has saved more Muslim and Arab lives than all the Arab and Muslim nations combined.”

a hell of a speech

In the March 8^th Newsweek columnist Fareed Zakaria proposes three solutions to the debt crisis in “Defusing the Debt Bomb.”

His second proposal was to “end the massive , distorting subsidies for homeownership, healthcare, and agriculture.”  I agree with him.

Canada and Britain have no home mortgage deduction  and they have a higher rate of home ownership.  Our mortgage tax deduction was  the result of using the tax code for social tinkering, in this case to encourage home ownership. The home mortgage deduction is regressive, giving a bigger tax deduction to the wealthier with more expensive housing.

Health care is also distorted by the tax deduction. We are actually encouraged to have too much first dollar coverage. Obama tried to address this is in some limited way with the tax on Cadillac plans and this was one of the few parts of the bill I liked. Removing the tax preference for employer controlled coverage would be a critical step toward restoring control of health insurance to the individual and get the employer out of it completely.

Farm subsidies are just ridiculous relics from the Great Depression. Obama spoke of eliminating such programs, but he lacks the ability to sell it after the poor way he handled health care.

Elimination of these tax subsidies may have to be gradual.  Such radical shifts especially in this market would cause pain but the end objective should be to eliminate them.  According to Zakaria these deductions cost the government $250 billion a year. But the pain they have cost in distorting the markets has been even worse.

We should see a reduction in the tax rates to offset some of the lost benefits.  Congress is certainly capable of spending every dollar they can find a new way to raise, and we still need to insist on spending prudence even though that almost seems laughable today.  I wonder if the populists and tea baggers who are truly concerned with the deficits will be ready to restore some common sense to these subsidies. Will they remain committed even if it affects their pocketbooks?

President Obama proposed to give tax incentives to small businesses to hire more people. This sounds like a generally good idea, unless you happen to have any practical experience which  is sorely lacking in this administration.

Read full article at American Thinker

It is not uncommon for anyone to omit something from his tax return or financial disclosures and find the need to file an amended return or statement.  It is another thing to omit numerous significant entities that could affect your stated worth or income by half. And it is entirely another thing if the absent minded taxpayer is the Chairman of the Ways and Means Committee that actually writes the tax code; Mr. Charles Rangel.

In the Friday (8/28/09) editorial of the Wall Street Journal they note that the Chairman amended his financial disclosure to report more than a half million dollars in assets and income, about half of his net worth.   He omitted his Federal Credit Union balance of over $250,000; vacant properties in New Jersey, stock in PepsiCo, and $75,000 in income from rental properties in the Dominican Republic.

While not significant sums in the scheme of trillion dollar deficits, it is sloppy at best and should be unacceptable from the man wielding so much power over how much taxes the rest of us pay. Given how many Obama appointees had to withdraw over tax improprieties, the Democrats would improve their credibility in tax and financial reform if they would demand some integrity from their own leaders.