Let's drug-test the rich before approving tax deductions

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Moore plans to introduce a bill on Thursday that she thinks will even the playing field or, at least, “engage the wealthy in a conversation about what fair tax policy looks like”. The bill, called the Top 1% Accountability Act, would force taxpayers with itemized deductions of more than $150,000 – which, according to 2011 tax data compiled by the IRS, would only be households with a yearly federal adjusted gross income of more than $1m – to submit to the IRS a clear drug test from a sample no more than three months old, or take the much lower standard deduction when filing their taxes. (In 2016, for comparison, the standard deduction for single people or married people filing separately is $6,300.)

“We spend $81bn on everything – everything – that you could consider a poverty program,” she explained. But just by taxing capital gains at a lower rate than other income, a bit of the tax code far more likely to benefit the rich than the poor, “that’s a $93bn expenditure. Just capital gains,” she added. And though her bill wouldn’t have any effect on low- and middle-income Americans, clawing back more than $100,000 in deductions from even a handful of super-wealthy recreational drug users – who would be forced to pay for their own tests – could be a much more significant revenue-raiser than testing Tanf recipients.

“Even Oprah gets the mortgage interest deduction,” she noted.

For instance, the seven states who implemented drug testing for Tanf recipients spent $1m on testing from the (recent) inception of their programs through 2014. But the average rate of drug use among Tanf recipients has been far below the national average – around 1% overall, compared with 9.4% in the general population – meaning there’s been little cost savings from the program. Why? “Probably because they can’t afford it,” notes Moore.

Read the full article:

https://www.theguardian.com/us-news/2016/jun/16/gwen-moore-drug-test-rich-for-tax-deductions

This is a fantastic idea.