It also makes no sense because those who want to keep the deductions for mortgage interest, charitable contributions and state and local taxes could simply stay in the current system.
A U.S. judge has ruled that Dow Chemical, the country's No. 1 chemical maker, can keep the tax deductions it booked for life-insurance policies it took out on thousands of its workers in the early 1990s, The Wall Street Journal reported.
"Any time you can keep the underlying economics of the deduction the same and take a complex Internal Revenue Code calculation and make it simple, it's always going to be better for the small-business owner," he said.
For the inevitable follow-up, keep the donation (and tax deduction) to yourself.
Since the largest benefits from rate reduction would go to upper-income taxpayers, they will also bear the burdens of "base broadening" reductions in existing deductions needed to keep the government from hemorrhaging revenue, he explained.
The newly public companies keep the remaining 15 percent, providing it with deductions that they otherwise would not have had.
But what's really dismal is that even reforms that could keep the gap from getting wider — ending the mortgage-interest deduction, challenging residential segregation — are politically toxic.
So Barclays will not only get a UK tax deduction for tax avoidance advice, but they will get to keep the money, tax-free, in a haven.
Among those expiring at the end of 2005: deductions for state and local sales taxes and college tuition, and measures that keep the number of families paying AMT from quintupling.
