Many of the democratic presidential candidates have proposed new tax plans. They are proposing completely new taxes, which would be written from scratch, tested and tried, with all the complication and administrative trouble that entails. But, one candidate recently came out with a plan that really has nothing dramatically new. Michael Bloomberg recently announced the kind of tax plans he would propose, and, most of it is dial-turning. He wants to change many rates, and turn off entirely several features of the tax code that cost a lot of money, and mainly benefit wealthy taxpayers.
Bloomberg recently came out with a tax plan of sorts. Some specifics: Bloomberg wants to increase the capital gains tax rates for the rich, increase income taxes for the rich, and get rid of a piece of tax reform that favors pass-throughs. It would also increase the corporate tax rate. Perhaps the most radical change (in my opinion) is that he would eliminate the step-up of basis at death for capital gains and get rid of like-kind exchanges.
These changes could raise a substantial amount of revenue. But, what is fascinating to me is that they would require really no additional pages to the Internal Revenue Code. They would not require new material in tax textbooks. They would not require more IRS employees (although Bloomberg also favors increasing funding to the IRS). They would not require more accountants to do more tax planning (at least as many as some of the other plans—the two big exceptions might be the planning around ending the “angel of death loophole” (the step-up of basis at death) and getting rid of like kind exchanges). They would not bring about legal challenges on Constitutional grounds. From an administrative and law perspective, these changes are relatively small (compared to say, a wealth tax, or a real corporate profits tax). But, they do actually raise some real money. They don’t have fancy names, and they probably don’t get people as riled up at campaign rallies as other plans. But if your goal is to raise more money with the code we have, Bloomberg’s dial-turning is one option.
