Sometime's I think we've just forgotten

I was having dinner with a friend down the hill this evening, and he was talking about how he found a tax deduction to be totally absurd, but he took advantage of it anyway. The deduct he was talking about was the mortgage interest deduction. This got me aggrevated for a number of reasons.

First, he was talking about tax code simplification. That's all well and good, but in the past twenty years, we haven't seen any "simplification" that wasn't in reality a way for the higher-income people to avoid paying more taxes than the lower-income people. My parents didn't get much back from Reagan's tax cuts, and I didn't get much lower taxes from Bush's tax cuts.

Secondly, and more specifically, the mortgage interest tax deduction was part of a set of policies that made home ownership possible for the middle class. In a way, it was a form of wealth redistribution, with middle-class people being able to buy a home and enjoy the capital gains from that, when in the past they wouldn't be able to borrow as much and leverage enough because of the overly stringent loan restriction of the banks at the time. Note that these restrictions didn't apply to the wheeler-dealers of the time. For examples, see the railroad barons that left bankrupt corporations in their wake while lining their own pockets.

So, folks, when you see a policy like a mortgage interest deduction, I'd like you to ask, "Why is this here?" And remember that it may be there to encourage a specific behaviour, like home ownership, that builds wealth and a strong middle class. Other regulations should be judged by the same standard, "Why was this put in place?" Regulations on energy companies that pollute? Remember that they didn't clean up and start calling themselves "Clean Coal" our of the kindness of their hearts. They were forced to clean up their act by the Clean Air Act, that Bush is in the process of destroying through little-known regulations. Regulations on corporations and their boards? The problem wasn't caused by "SEC overreaching", as Bush said in a cabinet meeting, but instead by repeal of regulations the SEC could have used to control their egregiously corrupt behavior.

I could go on, but instead I'd like every one of my readers to think about this. Every time Bush and his cronies talk about repealing this or that, think about "Why do we have this regulation in the first place?" And you'll find that by the repeal they're just wanting to enrich the fatcats, and impoverish the rest of us. Too often we've just forgotten why the regulations were there in the first place.