There's a lot of talk about closing loopholes to reduce the federal deficit. It seems that just about everyone wants to close just about all loopholes, sort of. President Obama wants to make millionaires and billionaires stop deducting certain expenses on corporate jets, including accelerated depreciation. That's a great proposal for getting votes since most voters don't have corporate jets. I might even support that one.
What about the loophole that lets homeowners with mortgage debt get a nice tax deduction? Is that a loophole? Yep, it sure is. What about the loophole that allows self employed people to deduct health insurance premiums? Is that a loophole? I think so.
When is a loophole not a loophole? Perhaps a loophole is something that allows someone else to deduct an amount from their income to avoid paying tax. When I deduct something from my gross income to save on taxes it's not a loophole. It's a benefit derived from my choice to behave in a certain economic way, and I deserve it. When you do it. it's a loophole.
So, the question remains, when is a loophole a loophole, and when is a loophole an incentive to behave in a way that helps the economy? Do we really want to take away incentives for oil companies to produce oil and gas in America? Would it be better if the domestic oil companies' tax loopholes were removed, possibly making it more profitable for many of them to go somewhere else? Sometimes I think we're our own worst enemy.