Memo to candidates: Let's talk taxes

Everybody knows about April 15 - the deadline for filing taxes. But this year, there's another date America's taxpayers should watch out for: Election Day.

While candidates will put out plenty of tax-policy soundbites between now and Nov. 2, taxpayers deserve deeper answers, says John O. Fox, a longtime tax lawyer, college teacher, and author of "10 Tax Questions the Candidates Don't Want You to Ask."

"Taxes cut across all of American life, so before candidates have ... earned our vote, they ought to tell us where they stand on a wide range of tax issues," he says in a phone interview from his home in Amherst, Mass. He sees this exercise as a much neglected way to probe leaders' values.

Mr. Fox takes a nonpartisan approach, but he's up front about what he thinks is fair: "People with equal abilities to pay should pay equally, and people with greater abilities to pay should pay appropriately more," he says.

About $3 trillion - nearly half of Americans' income income - is shielded by tax breaks, but the savings are spread out arbitrarily, he says, and they often don't support the people and social policies the government claims are priorities.

So next time candidates for Congress or the White House swing into town, ask them this: Would you be willing to cap deductions on home mortgages to more modest levels?

Fox has no problem with subsidizing the American dream of homeownership. But the tax breaks go too far, he argues, benefiting people with two homes or "McMansions."

With the deduction limit set at $1 million dollars, a high proportion of the savings go to people who can afford to live comfortably without the government's help. That leaves fewer resources for a much-touted goal - helping low-income and middle-class people afford a home.

You've probably heard candidates complain about "marriage penalties" in taxes. But what about the singles penalty?

When it comes to people struggling to make ends meet, the tax system gives families much more help than individuals. A married couple with two children had a poverty threshold of $19,000 in 2003, but didn't have to start paying taxes until their income exceeded $47,700, assuming they both work and have childcare expenses ($39,700 if they don't). Singles, however, had a poverty threshold of $9,600 and had to start paying taxes at $9,300. Such inconsistencies suggest "Congress is just not paying attention," Fox says. "Single people have failed to gather together and scream at them that it's outrageous."

Fox's short book also challenges the logic of Social Security and Medicare tax rules and disproportionate subsidies for people with top-notch employer health plans.

Under a simplified system with fewer tax breaks, Fox says, the costs of what only government can provide would be more reasonably shared. There would be more funding for health insurance, childcare, education assistance, and other services for those who need it most.

"We're at a crucial time in our history," Fox says. "These are great moral dilemmas which candidates simply aren't asking us to address.... Congress and presidents have refused to make transparent the way the tax laws work."

He doesn't really expect these issues to be solved, or even fully discussed, in one campaign cycle. But he hopes more people will see the link between good citizenship and being informed about tax policies. "Voters can understand this stuff," he says. "It's not Greek."