Tax break nation?

Ran across this article on tax breaks on WaPo's wonkblog. It's a nice breakdown of how taxes favor different cohorts, based on income.

As you can see from the chart, the biggest breaks favor the very rich.

One thing I found surprising is that the mortgage interest deduction doesn't more heavily favor the very rich.  The only two possibilities I can think of for that being the case are that 1) the very, very rich get almost nothing from it (as a percentage of income, at least) and 2) the biggest gainers are classified in this chart as upper middle class (doesn't seem likely, but not impossible, either).

Also, two things you can't see from this are how breaks in the inheritance tax (or aristocracy tax, as I prefer to call it) go entirely to the top 1% (might even be the top 1/2%) and the carried interest loophole that allows hedge fund managers to get their entire salary at capital gains tax rates (also goes entirely to a portion of the top 1%).

Oh, another thing that doesn't come up, that just occurred to me.  You can't see the totals of the dollars for tax breaks vs income taxes.  IIRC, they're almost identical numbers.  How sad is that?

IRS Scandal (?)

I really don't understand all the uproar over what's going on at the IRS.  Yes, it probably shouldn't have happened (almost certainly not, but I actually haven't heard enough details to be positive), but what is the IRS supposed to do in cases like these?

Well, here's a good run-down from tax policy expert David Cay Johnston:

Congress requires the IRS to review every application for tax-exempt status to weed out organizations that are partisan, political, or that generate private gain. Congress has imposed this requirement on the IRS, and its predecessor agencies, since 1913.

So, it is likely that something that shouldn't have happened, did.  But we shouldn't lose sight of the fact that the IRS shouldn't be giving blanket approvals for tax filing status (and, perhaps more importantly, for purposes of hiding donations and donors).

There's quite a few other important points made in Johnston's article.  Check it out, and wish that most of those breathlessly talking about Watergate-level scandal had done so (because they obviously haven't).

Let's just talk this out

I've long been a believer that 'Too Big To Fail' means 'Too Big To Exist', and that mergers and acquisitions (M&A) have no benefit for anyone outside of executives and stockholders (the former is entirely 1%ers, and the latter is about 60% 1%ers).

And I knew that this process of consolidation was also leading the government to send big subsidies the way of those companies.  And I'd recently learned that those subsidies were basically the entirety of the profits of the banking industry.

But it was still a bit of a surprise to find out that the FDIC had been quietly settling fraud cases with minimal settlements for a number of years.

Yeah, that'll get them to stop.  Sure it will.  As will Holder's recent admission that he is unable to prosecute these people.  Uh huh.  I'm just going to hold my breath until that works.

...

To what do I owe?

Just got back from two weeks in Hong Kong; got lots of stuff I want to write about, but been having trouble sitting down to do it.

So a brief shot before I get to the important stuff.

Was listening to NPR on my way in to work this morning; they were talking about a proposed government program to provide more accurate information to prospective college students. The idea is to get more accurate info than US News & World Report gets, plus make it a little bit less gameable.

That all sounded interesting, and useful (except, they said, graduation rates would be based on students who graduate w/in six years, rather than four or five).

But the reason I'm writing this is that, at the end, they stated that average student debt upon graduation is about $26k (I forget the exact figure). That does seem a little low to me (they could be adding in community college students, perhaps), although I don't know.

The bigger point is that they took that value and compared it to a car loan, saying that many people take out car loans for that much. True enough, but it isn't people just graduating from college (who may or may not have a job lined up) who are doing so, so I'm not sure of the value of the comparison.