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6 ways to make tax reform happen

Here are six ideas that can guide Congress to a tax reform-deal that both parties should be able to live with – a deal that will raise necessary revenue and help pay down the debt.

2. Convert itemized deductions into refundable credits

Itemized deductions are often called “upside-down” subsidies. They encourage some taxpayers to spend money on housing, charitable contributions, and to support higher state public expenditures, but the structure of the subsidy is perverse.

High-income taxpayers who are in the top tax bracket (39.6 percent in 2013) receive the largest subsidy – because an additional dollar spent on mortgage interest or given to charity costs them only 60.4 cents. And the two-thirds of tax filers who use the standard deduction or have no income tax liability receive no subsidy at all.

Instead, if Congress wants to motivate certain behavior, it should use refundable credits that provide the same benefit to everyone, regardless of income. The Bipartisan Policy Center recommends converting the deductions for both mortgage interest and charitable contributions into 15 percent refundable credits.

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Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

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The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

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