Subsidy or Tax Break… What’s the difference?
By Linda O’Keefe
Subsidy or Tax Break… what’s the difference?
When we can’t even agree on tax terminology (or, deliberately use it to mislead), how about simplifying the tax code?
Can we agree?
Taxes should not be punitive.
Taxes should not be used to control behavior.
Taxes should not be waived for some and not for others.
We have got to reform our tax codes. To simplify the tax code would remove so much of the power of DC politicians. Fair tax, Flat tax or whatever! Let’s do SOMETHING!
47% Americans do not pay taxes. Since they have no skin in the game, what do they care about the complexity of the tax code?
Democrats feed the tax-illiterate recipient-class political red meat. Case in point, Harry Reid spokesman Zac Petkanas recently spoke of the tax write-offs as “government giveaways to Big Oil corporations.” Of course, he neglected to point out that all other industries have these same write-offs on bad investments. These are NOT subsidies.
Harry Reid should know the difference between a tax break and a subsidy. After all, he’s the one who pleaded before the Senate on behalf of all the Cowboy Poets!
When the “evil” republicans wanted to cut the $50,000 that NEA (Nat’l Endowment of the Arts) was going to give to his state of Nevada to fund a cowboy poet festival, it was Harry who defended this SUBSIDY, not a tax break. Reid knows the difference, but he’s playing politics with those who don’t. He wants us to think our tax money is going into the pockets of rich oil executives.
Subsidies, tax breaks, what’s the difference?
http://reason.com/archives/2011/05/17/the-difference-between-a-tax-b
Good article! You should write more often, Ms. O’Keefe!
I agree that taxes have become a huge problem in this country. I have spent my career of 45 years equally divided between private corporation employee and small business owner. With out a doubt, one of the most difficult but rewarding achievements is to start a successful small business that serves the needs of others and provides employment to others.
Our tax system takes such a huge bite out of production that it discourages employee achievement or small business since the more you make the more you are taxed.
I believe that we the people need to freeze government spending and switch from taxes on income and assets to taxes on consumption.
Income, property and inheritance taxes penalize achievers and reward non-achievers.
You neglected to mention that the 47% DO pay lots of federal taxes, especially payroll taxes including social security, medicare, and federal and state unemployment tax. There is an income limit on the social security tax, so it is not paid on income above about $106,000. Those 47% are also more likely to serve in the armed forces than the wealthy.
“Let’s do something” is not very articulate, so if you write again, I’d hope you’d propose a more detailed policy solution to whatever problem you’re peeved about. The flat tax isn’t going anywhere because people just aren’t willing to pay 23% sales tax.
What might help is campaign finance reform, which would reduce the ability of those that benefit from tax breaks or subsidies to “rebate” part of their break back to the members of Congress that vote for them. Second, personifying corporations puts them on equal ground with ordinary citizens, except that the corporate “citizens” have many times the resources and power of the human citizens. That inequality allows them to get more breaks than the little guy.
Adam Smith said that great inequality was dangerous, and he was right. The tax system is a patriotic way for Americans to support the troops and help pay for the space program or needed infrastructure. What are your suggestions to make it more fair?
@tragic, couple things to mention and/or clarify.
“Let’s Do Something” is oftentimes used to get a conversation started. And posting a link to a story that outlines some basic understanding of tax breaks and subsidies and laying the foundation of what we agree on, hence, “Taxes should not be punitive. Taxes should not be used to control behavior. Taxes should not be waived for some and not for others.”–is doing something.
Bottom line–we all have a role to play. Some get conversations started while others may choose to lay out detailed explanations and specific policy differences. I’m not sure why you chose to pounce on Linda’s role choice, but maybe you could consider submitting an opinion-piece here and play a role other than critic of other people’s work.
Also, so you’re aware, the 23% sales tax is associated with the FairTax, not the FlatTax.