The Budget and Taxes

There is a lot in the FY 2010 US budget and it will take some time to digest.  But one thing that is clear right away is that there is a big tax hike coming for folks at higher income levels.  I for one have never been upset about paying taxes.  That’s probably in part because growing up in Germany my Dad, who was a teacher and – like all teachers in Germany at the time – a government employee, instilled a sense that paying taxes was a civic duty right up there with voting.  I still believe that today, although it is a lot harder during times when a lot of money is spent by government in ways that I disagree with (this certainly applied to the previous administration, but also to big parts of the bailout of the banks).  I wish though that much of the tax increase would be achieved by radically simplifying the tax code and eliminating loop holes that let some folks pay virtually no taxes even at very high income levels (ditto for corporations).  Instead, the rules seem to limit mortgage and charitable deductions, both of which would seem to have side effects counter to what we need right now.  Some interesting weekend reading ahead.