Quote:
Originally posted by Mmmm, Burger (C.J.)
Two separate choices. Eliminating the exemptions means a different direction, but it also means that there are fewer focused incentives that distort baseline economic activity.
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One of the things I have problems with is the idea of "baseline economic activity". Since neither the government nor the economic activity exist in a vacuum, the only baseline that exists is itself the result of a series of policy decisions, and cannot be divorced from them. If we have developed a bloated housing market fed by government tax breaks, and now decide to take the housing market off the tax breaks cold-turkey, we are making a decision to dramatically undercut the value of real estate around the country. Moving to "neutrality" is itself a policy decision with broad impact.
I have nothing against a shift away from some of the focused incentives, though I might lobby or get upset if we shifted from others (such as the charitable tax deduction), but am not certain I see a problem that is big enough to deal with the inevitable dislocation that would result from such a radical shift. It should, at least, be phased in over time.
