Wednesday, July 20, 2011

Obama and the Democrats Are Distorting the Term "Loopholes"

According to Obama and the Democrats, business activities like big oil production, corporate jet ownership, and the operation of a hedge fund are taking advantage of tax "loopholes" so that they can avoid paying taxes. This is a complete distortion of the term "loopholes".

Loopholes are an ambiguity in the tax laws that allow someone to skirt paying taxes. For example, if there weren't specific conditions associated with claiming dependent children as a tax exemption, both parents, filing taxes separately, could each reduce their taxes by both claiming the same children as dependents. But, that loophole doesn't exist and only one parent can actually claim any given child as a dependent deduction.

But, the things that Obama-and-company are claiming to be so-called loopholes are not ambiguous. They are legitimate deductions and tax advantages that were intentionally written into the tax laws, over time, by both the Republicans and the Democrats of Congress. Take, for example, the accelerated depreciation for the purchase of corporate jets. Obama and many Democrats call this a loophole. But, it's not. The fact is that it is an intentional tax advantage that was signed into law, by this president, as part of the Stimulus Package with the full intent that it would spur on corporate jet ownership and thus aid the International Machinists and Aerospace Workers Union by "saving or creating" their jobs during this recession. There was nothing ambiguous about it. It was clearly spelled out in that law. But, Obama, once again, has decided to use that particular tax advantage as a form of class warfare. My guess is that both "focus group sessions" and phone polling have determined that using of the word, tax loopholes, yields a more favorable response, politically; especially for those in Obama's own political base. For sure, the word loopholes has a negative connotation and implies, to some extent, that dirty pool is afoot.

To me, using the word "loopholes" is a totally dishonest tactic against what is, in most cases, a completely honest application of the tax laws. Once again, this president is playing fast and loose with the facts to gain political advantage. So much for the supposed "most transparent administration in the history of the United States"!

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