How fixing the tax code could result in detrimental effects to the middle class.
Fixing the Tax Code: As Congress and the White House continue efforts to find a viable solution to the fiscal cliff, one proposal is gaining steam – reducing tax deductions and credits. It’s estimated that these deductions and credits cost the federal government $1.3 trillion a year in tax revenues. Eliminating them would, in theory, plug the annual budget deficit. Many analysts, however, note that businesses and consumers tend to adapt their behavior after new tax legislation goes into effect with a goal of minimizing their tax burden. Its likely that doing away with deductions and credits would reduce the budget deficit but not eliminate it. A similar idea is also gaining momentum – capping total deductions and credits to a certain amount – could work, but only if the cap were low enough to capture a significant portion of taxpayers in the country.
Learn more at Bloomberg Businessweek.
About Mike Periu
Mike is a seasoned executive with experience in small business finance and management. He is the founder of Proximo, LLC a leading provider of corporate, consumer and small business education and training services with an emphasis on finance and technology.
Mike Periu is also a leading national voice for individual empowerment through financial education and entrepreneurship. He has been interviewed over 500 times in national and international media, including NBC, Univision, CNN en español, Telemundo, HITN, TVE, RTE, SBS, MegaTV and others.
Mike writes regularly for American Express OpenForum, Yahoo! Finanzas and is a Huffington Post contributor.
Mike has degrees in Finance and International Business from Georgetown University. He is on the Board of Directors of the Council for Economic Education and was a Fellow at the Kauffman Foundation’s Labs for Enterprise Creation.
