I think all deductions and credits should go, but it should be phased out over 10 years. Even the standard deduction, just replace that with a 0% tax bracket for the first $10,000.

Pretty much agree, the implementation is highly deflationary for housing markets (not just at the high end). They needed it, because the math didn't work out, but a sharp recession in housing isn't going to help balance out anything, and will blow a bigger hole than the Bush cuts. I've advocated for a reduction to 500K here, implemented gradually. The changes in deductions when implemented quickly will also slam churches/schools/non-profits.

OK, I will agree to the phasing over 10 years as a compromise, just to make some progress.

Why lower the 0% bracket to just 10K? This latest plan has it higher.

Whatever works. All the rates and brackets would have to be adjusted if all deductions are eliminated.

I also think the marriage penalty should be removed.

What about the deduction for charitable donations? That could potentially hurt a lot of charities. Even phased out.

If we change things to remove social engineering from government revenue generation there will be some losers. Lump large families, home owners, high tax states and electric car buyers in with charities. Phasing it in over a decade will avoid shocks but it will still hurt.

And that includes stripping tax exempt status from churches, etc? Not against that, just establishing the boundaries.

Fair question. The elimination of credits and deductions was only in respect to personal income taxes.

I don't have any firm thoughts on things like sales taxes, corporate taxes or how to handle non-profits.

Why lower the 0% bracket to just 10K? This latest plan has it higher.

I agree. 10k is about $5/hr @40hrs/wk. There are preschool teachers who make minimum wage or about $20k per year and I always found it crazy that they would have to pay anything while living on that tiny amount.

Sorry, please specifically define the "marriage penalty." There are a raft of marriage benefits/costs embedded in the tax code, and this new ""plan" pretty much keeps a web of policies.

Right now, ~30% file Sch A. If standard deduction is increased to $24k, that percent is going to drop a lot along with being able to deduct donations.

Wrong quote, but the marriage penalty I am talking about is this:
Once a couple starts to make $260,000 total, they are penalized for being married. Two unmarried people living together would be taxed less assuming equivalent incomes.

Change the 35% tax bracket to something like $150,000 for individuals and $300,000 for married couples and you eliminate the marriage penalty.

Yes, but the 401K deduction allows married couples to deduct 48K/year (over 50 years old), which is a single income earner penalty. This stuff is embedded everywhere. Additionally "Marriage penalty" would be far more accurately termed "two income family penalty". a single income earner gets a huge tax benefit by hitching up.

Well if we get rid of all deductions and credits, then we should get rid of join returns.

I give 10% to my church and this would continue as well as other giving...I think giving will stabilize and folks that only give because its a tax deduction don't make up that much at the end of the day.

I was reading yesterday somewhere that they are tinkering with S Corps. It appears that service base business will have to count all the income after expenses as salary, which means FICA taxes on the entire amount. I know many split the amount between salary and distributions now. This could be a pretty big tax hit to many small S-corps, like me.

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I'll be what I am
A solitary man

What about homes that have only one earner...? My wife stays home and has till now, not sure what she will do with all kids in college. I can't deduct 48K in 401K because she doesn't work. Yet she will need to eat when I retire, so this is penalty on families like ours. This is another reason why all deductions and credits need to go.

... or you wife could find a part-time job which offers a 401K plan and funnel 90% of her income into the plan, deferring all taxes. The 401K deduction is there to incentivize higher labor participation rates.

OK, looks like we got this all pretty much figured out.

We just need a volunteer to type it up and then we'll fire this off to Trump. We need a good sounding think-tank name so like the "American Heritage Lavender Room Enterprise for Tax Policy."

Stuff, indeed.

Think of the child tax credit more as a penalty for not having kids and it doesn't seem so fair.

Sin taxes on gambling, alcohol and tobacco? Who do you think pays the majority of those taxes?

Kahneman, Thaler et al have written lots of interesting stuff on taxes and behavioral economics.

but as this thread shows, i doubt we'll ever get significant buy-in on any plan.

Funny, I thought it was to help us fund our own retirement with pensions going away for most.

The marriage penalty is real, because I make a good living, my wife gets taxed at my highest rate on dollar one, whats the point of her working? In fact this is a disincentive for work force participation. While I get the strategy you suggest, its exactly that, a strategy organized around the tax code which has been my argument the last 24 hours on this thread...

Look, everything can be seen as an evil "strategy". Getting married places rich single folks in much better tax situations, whether you acknowledge it or not. The tax code SHOULD in some ways incentivize positive certain behaviors (or at the very least not disincentivize....).This includes charitable giving, getting married, having two incomes in a household, home ownership.... If a secondary income in a household were tax-free up to some level, that would simply be a more straightforward way to avoid the big hit on secondary incomes. It would still be an obvious convolution of the tax code, but it would (hopefully) lead to higher labor participation. I guess we can selectively slam portions of the tax code while not slamming others. Seems pointlessly ideological, why curse the dark when you can turn on a light switch? If your wife ends up working, find a place with a good 401K program. No need to thank me.... ;).

Well, how do you balance that against the spouse treatment for SS? You pay in the same as a single person and get 1.5x the benefits?

And people with massive medical bills.

This is the cruelest cut.

I agree something needs to be done about that. Medical bills aren't social engineering. But that solution should really should come out of a health care bill not a tax bill.