Politics: What are taxes for?
1) Raise revenue for government purposes
2) Subsidize activities the government believes (rightly or wrongly) to be beneficial for society
3) Redistribute wealth
Current workers pay Social Security taxes to pay benefits to retired individuals.
Current workers pay Medicare taxes to fund health care for the elderly.
High income earners pay income taxes that funds various programs that may or may not benefit them directly.
Are homeowners considered a special interest group?
One deduction in the tax code is interest payments to service a home loan. Thus, the tax code is subsidizing this activity.
Are workers who get health insurance from their companies special interests?
Health insurance benefits from employers are not taxes as salary. Thus, the tax code is subsidizing this activity.
Are people who donate to charity a special interest group?
One can deduct donations to IRS recognized charities. Thus, the tax code is subsidizing this activity.
Any deduction or credit one claims on the 1040 is a subsidization of that activity.
Government taxes the people to raise revenue to spend it.
The debate needs to be on how many of the current functions are proper.
Government has proper functions in society. I don't advocate getting rid of all the discretionary spending portion of the budget but it could use a trim (e.g. agricultural and energy subsidies go to the politically connected while education and housing are rightly local matters).
We need to talk about the big dollars in Social Security, Medicare, Medicaid, and Defense.
Interest on the debt is big but you can't stop paying the interest on the debt without a calamity on the financial markets so you can't really do anything about that one except borrow less so that part doesn't keep getting bigger!
Defense needs to be trimmed (listen up GOP).
Social Security and Medicare needs to be trimmed and re-organized because we should not promise benefits for our seniors we can't realistically pay for (listen up Democrats).
Funding of Medicaid is morally defensible because that is for the poor (listen up GOP). However, the way its organized could use some work (listen up Democrats).
The debate also needs to be on whether the tax code should have so many credits/deductions to subsidize certain activities.
Most forms of taxation are FLAT and impact rich and poor alike. This is not true of the income tax.
As a practical matter, I think the income tax system should be tiered progressively (i.e. higher income pays a higher percentage). I think the cap on Social Security taxes (currently at $106,800) should rise and eventually be lifted. I think most credits/deductions should be phased out over time.
Taxes should be primarily about raising revenue for needed government functions and much less about subsidizing activities the government deems desirable.