April 6, 2011 § Leave a comment
A recent online Wall Street Journal article raised the issue of tax reform and five problems with current federal taxation that should be fixed. These five problems included employees not being able to deduct health care premiums, renters getting no tax breaks, the alternative minimum tax, the taxation of social security benefits, and rules regarding retirement account required minimum distributions. The author makes very good arguments as to why all of the previously mentioned issues need to be fixed. Take for instance the fact that many employees can not write off self paid for health insurance unless their employer provides a cafeteria benefit plan (which many don’t), while those employees with better benefit plans enjoy tax-free employer paid for health insurance and self-employed taxpayers can write off their health insurance premiums. The taxation of social security benefits is also a major issue. It seems unfair that you pay social security tax when it is withheld from your paycheck as well as income tax on it when it was included in your taxable income, and then have to deal with the government taxing it again once you begin collecting it. Triple taxation? This article raised some very good points and I’m sure these issues will continue to be brought up until some type of reform comes about.