All Kinds of Stuff Wrong With This

Paul Krugman attacks the deficit commission co-chair report here. He neglects a lot of detail when he claims it's a huge transfer from the middle class to the wealthy because of lower rates. It looks to me like everyone's taxes will be going up, especially the super-rich.

1. It keeps PPACA medicare rate increase on the rich in place
2. It taxes dividends and interest as income - this is where the REALLY rich derive most of their income today.
3. As the report states, the middle class don't benefit nearly as much from the mortgage interest deduction as the rich do since the amount of this is only the delta it gives one over the standard deduction.
4. The rate for the middle class is also reduced in a trade-off for the increased tax on medical benefits - and this is a terribly distorting tax expenditure that is partly to blame for the high cost of health care.
5. Estate tax seems to revert to 2001 levels.
6. Expands payroll taxes to incomes beyond 105k.

As a middle-classer, it looks to me like I'd pay more in gas taxes - but Saudi Arabia will too and that's good (producers tend to share the cost of a retail tax with a consumer because the producer will lower their prices to reduce the dead weight loss). The loss of my current deductions would be a wash because a significant portion of my income would change from being taxed at 25% to 15% - my average tax rate last year was right around 15% after all the dust settled. Once I have paid off enough of my mortgage to where itemizing no longer makes sense I'd likely be ahead AND I'd save about 4 hours of time inputting stuff into turbo tax.