Bob...will the world end if you pay 20% Capital gain tax?

We need to pay bills. Are you going to be adversely impacted if the tax goes from 15% to 20%? Do you think that capital gain tax rate should be means tested?

I think that 20% worked when it was dropped from 28%......nobody wants to talk about the math, and the truth is that the capital gains rate must be increased.

I'll happily have my capital gains tax rate increased to 20% if the fat cats have to pay it too. But only if we take away all the deductions and loopholes and go with a flat tax for straight income that can be calculated on the back of a postcard. And only if we have a balanced budget amendment so the government will have to stop the borrowing.

I think the polls say that your opinion represents about 80% of the American population. It must be a blended approach, but we need to start with stopping this charade that cutting taxes by 20%, eliminating the estate tax, having a zero rate on capital gains, and simply off setting this with deduction reform will balance our budget. It will not.

I do like what I have called the Romney cafeteria approach to deductions. Set a limit. Keep all the schedule B deductions, but your schedule B will be simplified with a simple form which accounts for which of the deductions you have chosen to meet the limit. Simple

I am in a minority on this forum. I believe that the entire Bush tax cuts must expire. The top earners should see this immediately, but the balance of Americans must start paying for this mess. The problem is that the rest of America is what creates the demand for our economy, and choking more money out of that sector will retard economic growth. The only way it can work is through massive job credits and job creation as jobs returned to America are rewarded with some of these revenues which are being collected. GDP expands, and with a larger economy revenues boom, and the deficit is finally addressed. During this same period it is essential to improve productivity in government which means lowering the number of employees and processes which can be done more efficiently.

Bob, you are America, and I think we are all willing to sacrifice if the game is fair and not rigged.

I admit that I am no financial wizard. Can I play the devil's advocate here and ask which entities will suffer if deductions for 501(c)3 contributions are eliminated?

I have never been a big fan of the National Endowment for the Arts and similar niche foundations and am not convinced they should get public funding and tax-exempt statuses. The world isn't going to end if the local youth ball park loses some funding either.

Call me a bleeding heart liberal if you want, but I'd hate to see elimination of deductions for contributions to food pantries, soup kitchens and homeless shelters... agencies that serve the truly needy folks.

Yomama wrote: but I'd hate to see elimination of deductions for contributions to food pantries, soup kitchens and homeless shelters... agencies that serve the truly needy folks.

That's a point I overlooked when I said I want to eliminate all deductions.
I agree. And there are no doubt other tax deductions which should also be maintained.
Life is so simple when I try to make it simple. But simplicity is probably something found only in the mind of simpletons. lol

This is where Romney's cafeteria plan is brilliant. You do not get into the specific perks which Congress has given away to special interest groups. You simply set a limit and each taxpayer can pick and choose what deductions they want to take, but in no circumstances will it exceed the set amount of deductions.

So lets say the Salvation Army, Cancer Society, or your church has been a large part of your contributions, you will still make those deductions, but the total of your mortgage and other deductions can not exceed the limit on deductions. Eventually, I think Eric is correct because a person using their mortgage deduction is probably going to reach the limit, and therefore the donations to charitable organizations will not bring you any additional advantage. Now if they allow a typical three year carryover for unused deductions, it would be interesting. So if you donated a 5k car to your church, but your mortgage deduction was 15k, and the limit was 17k....then you could carryover 3k to next year and apply 2k, and carryover the remaining 1k for the next year. Romney is nuts on his tax proposals, but this is really a very good proposal.