The debate over tax reform
It's the time of year when people are talking about taxes and so are the politicians. Everyone heading into the 2012 elections seems to be calling for change. But as YNN's Bill Carey reports, it is unlikely anyone can work a deal to bring those changes about.
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SYRACUSE, N.Y. -- Another tax season is drawing to a close and another debate is underway over the future of taxes as the nation battles a massive deficit.
Republicans, like Wendy Long, want tax rates cut. Long is battling fellow republicans George Maragos and Bob Turner, for the nomination to oppose democrat Kirsten Gillibrand this fall. Long talks about paying for tax cuts by closing loopholes. But what loopholes? The biggest is the tax deduction given homeowners for interest payments on their mortgage. Should that be eliminated?
“No. The answer is no,” Long said. “What you need to do is lower rates and close as many loopholes as you can and simplify it and make to pro growth and pro jobs.”
Democrats like Charles Schumer say they too want changes, but changes like eliminating tax cuts for those at the top of the earnings scale. What about real tax reform?
“That's a big job and it's complicated by the fact that we have all these taxes expiring, tax cuts, Bush tax cuts expiring, at the end of this year. So I think while we ought to begin to get into reforming the tax code, which makes sense to do, it's going to be very hard to see it done during this election season,” Schumer said.
The two major parties, representing very different philosophies, have found common ground in the past. The last substantial tax reform was delivered back in 1986 under then-President Ronald Reagan.
“It's not like '86 when Reagan could work with Tip O'Neill,” said Syracuse University professor Jeff Stonecash.
Political scientist Jeff Stonecash says much has changed in the ensuing 26 years since the Reagan tax deal.
Stonecash said, “I don't think there's any possibility of doing anything between now and November.”
The biggest roadblock? The most conservative and the most liberal members of the two parties have solidified their voting blocks. The divide between the two parties has grown wide.
“I don't know what's going to break it, to tell you the truth. I really don't. It's going to be hard for anybody to make that move across the aisle because their base, each party's base, is so rabid,” Stonecash said. “We can't raise taxes. We can't cut entitlements. And both of them need to happen.”