Tax Reform

[FlyingRon]

The scary parts are the stuff I omitted like the pass-through changes and other things that don't apply to most of the citizenry. Yes, the Republicans have gone from decrying the "tax and spend" Democrats to being the "spend without taxing" party. It's laughable their stated strategy that running the government furhter into debt will force us to be more fiscally responsible.

I've often thought we should just start over on the tax code. Wipe out all the historical pork and preferences. Set down a few prefered dedcutions and fix the rates at what it takes to run the economy.

Of cousre, that's not going to make anybody happy. Why should we have inscruitable energy credits and credits for virgin island hedge fund bankers in there?

 

[CTU]

I can only imagine the reactions of those who are paying alimony ...

 

[Taxing Matters]

I can only imagine the reactions of those who are paying alimony ...

I have long thought this change was needed. Alimony is a form of support, and ought to be taxed the same way child support is treated. But you are right that those who set up their alimony arrangements counting on the deduction to lessen the bite of it will not be happy. I will bet that some people paying alimony will go back to court to reduce the amount they pay to reflect the tax change.

 

[FlyingRon]

I have long thought this change was needed. Alimony is a form of support, and ought to be taxed the same way child support is treated. But you are right that those who set up their alimony arrangements counting on the deduction to lessen the bite of it will not be happy. I will bet that some people paying alimony will go back to court to reduce the amount they pay to reflect the tax change.

My major surprise is I thought there would be a decent number of alimony-paying members of congress, but I guess I was wrong.

 

[PayrollHRGuy]

I never understood why alimony was deductible. It is basically money that would have been spent on the spouse if the couple weren't divorced.

 

[FlyingRon]

I never understood why alimony was deductible. It is basically money that would have been spent on the spouse if the couple weren't divorced.

I think it was parity. Alimony was considered taxable income to the recipient, so it was only fair that it not taxed to the payer. Of course, the problematic part is that the taxability may have been taken in to consideration when the amount was set so this is a bit of a windfall to the recipient.