Search This Blog

Thursday, December 16, 2010

Boston Tea Party Anniversary

The Boston Tea Party was 237 years ago today (December 16, 1773 - see Library of Congress picture). For years, I have thought this anniversary might be a good time to consider what tax rule we might want to "dump." Of course in recent years, the spirit of the Boston Tea Party has lead to the Tea Party movement (not entirely sure what this really is - Google searches bring up lots of divergent information).

But what about the anniversary as a day to think of something in the tax law that should be dumped? I'd suggest some odd provisions such as allowance of deduction of interest on debt on a second home, as well as home equity debt and the very large $1.1 million home mortgage debt limit (even the median home price in California is under $500K). These are some of the more "expensive" tax expenditures. Why not reduce them and use the additional taxes collected to help pay down the debt and reduce tax rates?

What might you want to dump and why?

1 comment:

Peter Reilly said...

I don't know if it picks up much in the way of revenue but I think the parsongae exclusion should be limited. The simplest way to do it would be to link it to military housing exclusion which don't go over $4,000 per month (that would be for a vice admiral living on Nantucket). The other way to do it would be to use a similar ratio between salary and housing allowance with a cap. I think I'm just aggravated about this now because of the Tax Court decision Driscoll v Com (135 TC 27(which allowed somebody with some sort of music ministry to exclude parsonage for two homes. In one year the parsonage exclusion on the second home was $195,000.