Live Blogging From Debate Night With We Want Bernie Worcester
I'm live blogging the Democratic debate from the Sahara Restaurant on Highland St in Worcester. I arrived early and snagged a table with an electric outlet. As of...
Hillary’s Tax Proposals Will Make Things More Complicated
Clinton’s worst proposal for those of us who would like to see an Internal Revenue Code with fewer bells and whistles is a temporary tax credit (two years) for companies that establish profit sharing plans. Robert Samuelson nailed it in his analysis.
Hillary Clinton has just given us an object lesson — presumably unintended — demonstrating why our tax system is such a complex mess. The main reason is this: Politicians of both parties cannot resist the temptation to use the tax code to promote the latest political fad or to please favored constituencies.
As a tax adviser, I can tell you this. I would be only recommending looking at this credit for somebody who was going to do something like it anyway, which by the way is the way the research credit works in the world that I play in. Experts go in and identify all the things the company does that can plausibly be considered research.
A lot of firms that have bonuses as part of their compensation scheme – like many accounting firms – would all of a sudden have profit sharing plans (at least for a couple of years). Of course there will be safeguards to prevent that type of abuse- adding a few more thousand words to the Code or the regulations.
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Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.