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Let me preface this by seeing I'm usually against tax cuts, and every single California tax increase proposition that I've come across I've voted for. That sai

Let me preface this by seeing I'm usually against tax cuts, and every single California tax increase proposition that I've come across I've voted for. That said, I'd be all in favor of eliminating all these special tax deductions in favor of reducing taxes if it streamlines the federal tax code and prevents tax dodging and cheating. The idea of using taxes as a stick and carrot just leads to abuses (at least the carrot side of things). Taxes should mainly be used to fund the government, and ensure that things with huge negative externalities (e.g. smoking, environmental pollution, etc) are paid for. Taxes themselves shouldn't be part of a giveaway. If we need to direct funds to a certain part of the economy the government should just do it in a transparent way, such as offering grants to graduate students.

WalterBright 9y ago
In the 80's, Reagan's tax cut deal with Congress was trading reductions in marginal tax rates for elimination of a long set of deductions, predominantly tax shelters. Everyone remembers the former and not the latter :-) Part of the economic growth after that was surely the shift in investment from tax shelters to much more productive investments.
- comicjk 9y ago
  There are simpler factors to explain the good economic growth 1982-1988: a big drop in inflation (engineered by Fed chair Paul Volcker) and a drop in the price of oil (mainly just luck). There was also a lot of deficit spending. Reforms in the 1981 and 1986 tax bills may have been helpful on the margin, but they're small compared to economic fundamentals.
maxxxxx 9y ago
If they also had eliminated the carried interest loophole for hedge fund people and VCs I would actually be on board. I am also a little skeptical of the 25% for pass through entities.
- jdavis703 9y ago
  The 25% is going to be abused really bad... There's major problems with the bill, but every special interest (retirement savers, home owners, grad students, R&D corporations, etc) coming out for their pet tax exemption is part of the problem.
seanmcdirmid 9y ago
Having had a tuition waver before, there was absolutely nothing to report (no money paid, no money taxed), it most definitely had no impact on tax filing complexity. What they are proposing is to make tuition wavers a “real thing” rather than something that just existed on paper in a university somewhere, that is bound to make life much more complicated. It will also probably completely restructure graduate education in the USA, since many grad students have free take no classes and rather take 9 credits if “independent research”, which basically means they get to work in a lab.
- Fomite 9y ago
  And it is important that grad students be enrolled in classes, even if they're 9 credits of independent research. Student loans, insurance, etc. depends on maintaining student status.
  - deleted 9y ago
    [deleted]

WalterBright 9y ago

In the 80's, Reagan's tax cut deal with Congress was trading reductions in marginal tax rates for elimination of a long set of deductions, predominantly tax shelters. Everyone remembers the former and not the latter :-) Part of the economic growth after that was surely the shift in investment from tax shelters to much more productive investments.

comicjk 9y ago
There are simpler factors to explain the good economic growth 1982-1988: a big drop in inflation (engineered by Fed chair Paul Volcker) and a drop in the price of oil (mainly just luck). There was also a lot of deficit spending. Reforms in the 1981 and 1986 tax bills may have been helpful on the margin, but they're small compared to economic fundamentals.

maxxxxx 9y ago

If they also had eliminated the carried interest loophole for hedge fund people and VCs I would actually be on board. I am also a little skeptical of the 25% for pass through entities.

jdavis703 9y ago
The 25% is going to be abused really bad... There's major problems with the bill, but every special interest (retirement savers, home owners, grad students, R&D corporations, etc) coming out for their pet tax exemption is part of the problem.

seanmcdirmid 9y ago

Having had a tuition waver before, there was absolutely nothing to report (no money paid, no money taxed), it most definitely had no impact on tax filing complexity. What they are proposing is to make tuition wavers a “real thing” rather than something that just existed on paper in a university somewhere, that is bound to make life much more complicated. It will also probably completely restructure graduate education in the USA, since many grad students have free take no classes and rather take 9 credits if “independent research”, which basically means they get to work in a lab.

Fomite 9y ago
And it is important that grad students be enrolled in classes, even if they're 9 credits of independent research. Student loans, insurance, etc. depends on maintaining student status.
- deleted 9y ago
  [deleted]