Budget Changes and Tax Reform

May 5, 2011 § Leave a comment

After watching the discussion on the President’s proposed budget on CNBC, I realized what a delicate balance there is between the country’s financial needs and the tax revenue that funds them.  It seems everyone sees that there is a problem of unlimited needs and very limited funds, but when it comes to solutions it looks like the only way to work through this is for everyone to put their pride aside and realize there really is no one solution to this problem.  Its going to take a lot of give and take between both parties and all opinions.

As far as the budget goes, I would like to see more money being allocated to sections like education and job training versus the money that is being spent on income security like housing assistance and food and nutrition assistance.  I understand that we are facing hard economic times and that many people do need assistance.  But I also feel that by putting more funding into activities that enable people to provide for themselves instead of causing them to rely on government handouts, the government would be doing everyone a favor.  While sometimes everyone needs a little help to get back on their feet, and with the high rate of unemployment many people are still not financially stable yet, I have a hard time seeing the President spending nearly 15% of the budget on income assistance type programs while putting only about 3% towards programs that help give people the skills they need to support themselves.  I’m not saying that the solution is simple, but I do feel that something needs to be reconsidered.

Another change to the proposed budget I would like to see made would be to expand upon the reduction of administrative overhead in government, including a freeze on upper-level government position salaries and a combining of positions that have been unnecessarily divided and that would be more cost-effective as one position.

As far as tax reform, I would like to see a broader tax base.  Although no one really wants this, it seems an increase in who is being taxed as well as an increase in tax rate seem to be necessary if the country is ever to get out of the deficit it is in.  Increasing the tax on the wealthy is not going to fix the whole problem.  While I do feel those with a higher income should be paying a higher amount of tax, the percentages should not be spread out so far that the wealthy is bearing the full responsibility for the tax burden.

I would also increase gift and estate tax instead of raising the amount that can be exempt from taxation.  I think taxing more of these items would actually help a greater number of people by perhaps decreasing the amount of tax needed from regular income, such as wages.

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Summary of Posts

May 4, 2011 § Leave a comment

1/28/2011  “State of the Union Address”  Discussed the importance of Obama’s emphasis of togetherness and both political parties working together to accomplish health care reform and other innovative movements for America.

2/22/2011  “Solution to the Health Care Debate”  Looked at the possibility of treating health care benefits as taxable income and the benefits of adopting such a policy.

3/10/2011  “New Tax Break”  Discussed new tax rules that involve gift taxes and increasing the amount allowed for gift tax exemptions.

3/10/2011  “Will the Housing Market Ever Bounce Back?”  While spending seemed to be on the rise, the housing prices were still declining and for many people it seemed that any break in housing was coming too late.

4/6/2011  “End of  Tax Season”  I touched upon some last-minute tax tips offered by one article including certain audit triggers that people should be aware of as well as charitable contribution deductions that often go unused.

4/6/2011  “The Art of Deduction”  Using the tax code to get the most benefit out of tax deductions and exemptions.

4/6/2011   “Tax Reform”  Five problems that should be fixed by new tax reform, including lack of health care premium deductions and taxation of Social Security benefits.

4/28/2011  “Talking to the IRS”  Importance of communicating with the IRS over issues and not ignoring their attempts to contact you as well as tips on what to do once you are face to face with them.

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