1. The tax credit offered individuals does drastically diminish for everything past the first house. It can only be a tax shelter if it is a residential property that you use as your primary home and you can only get additional protection as long as the remaining properties are used as income sources such as rental properties. But these make poor tax shelters as you have to pay hefty maintenance fees and you still have to pay the property taxes which can be more significant, dependent on where the house sits. Most land used as tax shelter is land that can be developed that hasn’t actually been used. Property that has been zoned for use but remains undeveloped can be listed as an investment and therefore can be treated separately in regards to your income sort of as a “loss” to income. It of course gets much more complicated but my point is real estate will remain a tax shelter as long as you have the cash to buy and the smarts to find the right property.

2. Since most retirement accounts have limitations on the amounts you can deposit per year, and are geared towards long term investment, therefore you receive penalties for pulling your cash out prematurely, to make this single account system work, the entire investment system would need a serious overhaul, and if the last year hasn’t proved how unlikely that is to occur then you haven’t been paying attention.

3. Religions / Churches have several layers of tax protection, some legitimate and sustainable and some unfair. Due to the First Amendment the Federal Government determined that it was inappropriate to tax a Religion because it exists. This has been seen as a potential conflict with “Congress shall make no law respecting an establishment of religion, nor prohibiting the free exercise thereof.” Requiring payment to exist has been seen as doing just that. Now this is where it gets a little uglier, politicians were unhappy with the church’s influence over policy, and following certain messes, not the least of which was prohibition, so LBJ, then a senator found an ingenious way to do it. He included them in Article 501c3 of the Tax Code. This article guaranteed that if an organization met certain requirements then they could apply for tax exempt status and could not be required to pay taxes. The reason this was so shady is it gave the government a weapon to say that if a church gets involved in public matters such as campaigning for a cause or a candidate, the Federal Government can then revoke that status, citing it as a political organization and not a religious one and demand taxes. Kind of crafty but it has not been used as effectively as LBJ intended way back in 1954 when this became law. If we remove that status, many politicians feel that the influence of the church would be even harder to reign in than it is now.

I won’t even get into the quagmire that provides them a tax exempt status from property taxes but it runs along the same lines.

You may not agree with these points, and there are many measures that can be taken to fix our system, keep thinking up new ones and lets find some that haven’t been tried before and start a movement. I have some ideas of my own.

You are starting to sound a little to the right, are you okay? Flu bug at your house also?