Quote:
Originally Posted by Minte
When a private citizen is willing to invest his/her money in municipal bonds they are already doing something very good for their community. There are a few people that will do things like that only because they are civic minded and do care... or they want a statue of themselves built at the local library. Local bonds for business is a really good thing. We have used them to invest in some machinery. Anyone that has the money to do it should be rewarded by not paying income tax. I know that this money could be invested elsewhere for a lot better return and less risk than in bonds.
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Im all for a tax benefit on those investments... with a limit.
Reducing your tax burden by 5 or perhaps 10 percent by using your money to benfit society is a plausible goal.
Reducing it by 20 or 30 percent is abusive.
It works the same way on the sales tax arena where tax policy can be a useful incentive.
Soda should be taxed more than water, fast food more than supermarket vegetables.
Taxes can and should be used to encourage or discourage behavior.
If they tax soda 10% more than bottled water that makes some sense.
If they tax soda 80% more than water it stops making sense.
An 'absolute tax rate' that limits the total of all deductions, exclusions and credits to a minimum allowable rate is a simple and useful mechanism.