Speaking of insanity, when will Republicans stop their fetishistic devotion to the wealthy after the party has been abandoned by them? As Victor Davis Hansen point out, 8 of the 10 wealthiest counties in America voted for Obama in November 2012, yet the party continues kowtowing to the uberrich by most recently exempting Hollywood from animal cruelty laws. Hollywood isn’t exactly supportive of the GOP, yet that hasn’t stopped the party from cosponsoring and supporting legislation such as the DMCA even going so far to fire Derek Khanna, formerly of the Republican Study Committee for daring criticize the legislation that protects the film and music industries at the expense of artists and consumers.
It’s time to cap the tax exemption on charitable giving. Why not a cap on say, $10 million? Everything beyond that is taxable. Such a cap won’t hurt charities like Goodwill or AmVets, two charities that are largely supported by small donations from individuals, but it will put a dent in giving to large high profile charities and foundations supported by liberals that in return support liberal causes. Hansen suggests limiting the mortgage interest tax deduction to a single mortgage on the primary residence to the first $100k with no interest tax deduction on second or vacations homes. After all why should taxpayers subsidize mansions and multiple homes of the wealthy? Also, disallow the tax deduction for state and local taxes. For the average taxpayer this won’t result in much, but it would kill those who live in Blue states such as California, Illinois and Connecticut who are allowed to deduct their high state taxes from their federal taxes, in effect forcing people living in low tax Red states to subsidize the wealthy in La Jolla and the Hamptons. As Ann Coulter states, “You want high taxes, New York and California? Then pay them — with no deductions for state and local taxes on your federal returns.”
Coulter also points out that the reason why capital gains are taxed at a lower level than wage income is that most people pay taxes on their labor and then invest the money, so capital gains are a form of double taxation. But for the likes Warren Buffet who are compensated completely through capital gains, they do in effect pay a lower rate than the doctors, engineers and others who have to work to get the cash they need to invest. She writes, “Close that loophole. Almost no Republicans will be harmed in the making of this tax change. (There’s a reason Sen. Chuck Schumer fought so hard to save it.)”
Then there’s the Hollywood excise tax that Instapundit Glenn Reynolds has suggested re-instituting the excise tax on Hollywood that was repealed in the 1950’s. Hollywood has replaced the blacklist and slavish devotion to anti-communist ideology of the 1950s with their leftist equivalents today. The industry provides an outlet for a leftist interpretation of history (watch any Oliver Stone film to see what I’m referring to) while enjoying the benefits of conservative tax policy. As Reynolds notes, “Why should movie stars and studio moguls, with their yachts, swimming pools and private jets, not at least shoulder the burden they carried back in Harry Truman’s day—when, to be honest, movies were better anyway.”
Update: Victor Davis Hanson weighs in.
If the country is going to turn redistributionist, then we might as well do so whole-hog — given that eight of the wealthiest 10 counties in America voted for Obama. Why not limit mortgage interest deductions to just one loan under $100,000 — while ending tax breaks altogether for second and third vacation houses?
Under the present system, the beleaguered 99 percent are subsidizing the abodes of Hollywood and Silicon Valley “millionaires and billionaires” — many of whom themselves have been railing against the one percent. Should the government provide tens of thousands of dollars in tax breaks for a blue-state one-percenter to live in tony Palo Alto or Newport Beach when there are plenty of fine homes far cheaper and sitting empty not far away in Stockton and Bakersfield?
Blue states usually have far higher state income taxes that are used as deductions to reduce what is owed on federal income tax. Why should working folks in Nevada or Texas have to pay their fair share, while Wall Streeters get huge federal write-offs from their New York or Connecticut state income taxes?