What About Taxes?

By Michael G Posted in Comments (23) / Email this page » / Leave a comment »

Lately, George W. Bush has been getting on my nerves. As he tours the country promoting his non-existant, weak-willed plan to save Social Security, he seems to have forgotten, as have all our Republican leaders, about the plan to overhaul the tax code.

Social Security was not an election-year issue. I fail to remember it being mentioned once in 2004 (except, prehaps, for Dem mutterings of a "January surprise"). The domestic issue which really got me fired up with enthusiasm was the plan by Speaker Hastert to abolish the income tax and totally revamp the tax code, including possibly getting rid of the IRS. A national sales tax in lieu of personal income tax is something I would love to see, and I'm sure many of you agree.

Social Security, which started strong, is now a non-winner in the political game. The Republicans lost the opportunity to take it head on and seize the credit for reforming it by hemming and hawing over the details. Bush doesn't even have a concrete plan to promote, and yet he is out there trying to drum up support for it. I also disagree with his policy of not letting dissenters in with valid questions. Just screen the questions before hand to root out the stupid or off-topic ones, and have a public debate. If he can't stand the heat, Bush should stay in the White House and not make himself look like a wimp. If we are to succeed in reforming Social Security, we need to get down to business and hammer out the details NOW, and while we're doing that, take some of the public focus off this complex issue by taking on taxes.

Since I'm on the topic of election promises that the Republicans have failed to deliver, let's talk about abortion. I and just about every other social conservative who voted for Bush want it gone, and all that has to happen is for Congress to pass a bill defining human life as beginning at conception. No mention of abortion is needed, and the bill would be completely constitutional and unchallengable in court. Boom, problem solved, at least while we have control of Congress or the presidency.

2008 will be a major problem for the GOP if our lawmakers do not get their collective rears into gear and start fulfilling some of the promises they made to the voters. A lot of people will stay home next time if they don't feel that voting for Republicans will get anything done.

Bush and most of the other Repubs all seem to be wasting their political capital on crap like judges and Schaivo.

If when Bush leaves there is neither tax nor social security reform, I'll consider it one of the biggest wastes of a presidential term.

And if somehow abortion is magically banned and the IRS is abolished, what will keep trusty conservatives coming to the polls?  They need a willing flock to vote them in so they can pass huge corporate giveaways to their donors and golf course pals in the form of Medicare prescription boondoggles and bankruptcy "reform" and "tort reform."  At the most, you're getting a partial-birth abortion ban.  And I'd say that will be a huge stretch.  

liberals passing legislation to keep people poor and uneducated so they keep coming out to vote Democrat.  That explains all the rent control, minimum wage, and protectionist legislation along with the support for monopoly schools and the anti-reform stance on education.  Thanks for clearing that up.

of the priorities expressed in the current legislative agenda is noted.

On your charges, I'll give you rent control, that's bad policy (and not one I support or hear many Democrats loudly defending as some sort of panacea), although it's a necessity because a lot of the jobs are in cities, and a lot of people who work them simply cannot afford to live anywhere near their jobs without some sort of regulatory interference, thanks to equally horrendous policies like exclusionary zoning.  Everyone needs service workers, and they gotta live somewhere, but nobody wants to build affordable housing for them.  Rent Control is a shoddy solution to a problem that itself is a result of bad, selfish public policy choices.  You reap what you sow.

There's plenty of objections to a minimum wage (albeit a wage that hasn't grown very much lately) but I never knew they kept people poor - ask the most libertarian economist out there.  And as for "protectionist" legislation, Japan is about as protectionist as you get, and I'd argue that they're significantly more affluent on average than the United States.  Good jobs are a good thing to keep around.

I'm not sure what stunning "reforms" have been blocked in education, considering everyone and their grandma jumped onto the NCLB bandwagon and waited breathlessly to see how throwing more multiple choice tests at the nation's kids would make them better learners due to "accountability."

Bottom line though, is that Democrats sure aren't controlling the agenda right now.  The ball's in the GOP's court, and there's nobody to blame when they spit on the base (or patronize them, in the sense of the Schiavo fiasco) in order to please their chums at the top.

Maybe next time you could say something on topic instead of ramnling to yourself.

your abortion suggestion would accomplish nothing. Even assuming the courts would go along (a big if; they could just as easily strike down such a "definition" as they did the abortion laws of all 50 states) you would still need to pass specific statutes criminalizing abortion and detailing penalties. Would Congress do that? That would be a betrayal of federalism since before Roe vs Wade was decided abortion law was a matter exclusively for the states. But if you leave it up to states then some states would laws greatly restricting abortion while other would not. Can you live with that result?

Bush wasted a ton of political capital. I too would have rather seen the effort on deficit reduction and tax reform.

in the form of The President's Panel on Tax Reform, a bipartisan commission co-chaired by former Senators Connie Mack and John Breaux.  The Panel has been traveling the country visiting various cities and being educated on various concepts.  The transcripts of their hearings, as well as a lot of other information, are available on their website, http://www.taxreformpanel.gov/index.shtml.  

The FairTax plan (http://www.fairtax.org) received support from the Chicago presenters (http://www.taxreformpanel.gov/meetings/meeting-03162005.shtml), particularly the first two presentors, in addition to the support of Alan Greenspan for a consumption tax.  The FairTax is picking up support and the movemnet is growing.  They have scheduled a presentation in Washington, D.C. on May 11th before the Tax Reform Panel to present their proposal.  The Panel is expected to present their findings to the President in late May or June.  

However, if you want to learn more about the FairTax before then, there are any number of sources out there starting with the website above.  We need your support.  Join the FairTax, sign the petition, and write your congressment.  Together, we can reform the economy, eliminate the IRS, create millions of jobs, and make April 15th just another fine spring day.

I'd like to see the results of this panel, once they review the Fair Tax.  The only fear I would have is that it would get struck down because it makes too much sense.

we need a grassroots movement in order to get the FairTax passed.  The congress needs to understand that their constituents want this.  

Proposing a new national sales tax is a sure way to unite conservatives and liberals against you.  Liberals will hate the regressiveness; conservatives will rebel against a new tax and won't believe the income tax won't come back; deficit hawks and the financial markets won't believe the revenue will be there.  The "Fair Tax" is way too radical to have a prayer of passage.

the FairTax plan is not regressive.  Actually, the FairTax is much more progressive than the Flat Tax.  Plus the plan calls for repealing 16th ammendment, which is more difficult to do.  And even IF the 16th ammendment is not repealed, the FairTax eliminates that support structure to collect the taxes (e.g. the IRS and reporting of income just to name a couple of examples).

Deficit hawks and financial markets LOVE the FairTax.  Financial markets because the FairTax encourages investing which stimulates markets and the economy.  Deficit hawks because as the economy grows, more money fills the government coffers.  More than 75 economists recently signed an open letter endorsint the FairTax in addition to Greenspan's comments.  (http://releases.usnewswire.com/GetRelease.asp?id=45733)

Don't forget, the government can pass a national sales tax any time they want, even without eliminating the curent income tax structure.  With the FairTax, there are provisions to dismantling as much of the support structure for collecting income taxes as much as possible.  

As for your last statement, I agree that the FairTax is radical, but radical is what is needed here.  Which is why we need the grassroots suport.  I think it has more than a prayer, especially with the support of Alan Greenspan and hopefully fo the President's Panel on Tax Reform.  I'm not at all sure that the FairTax will pass, but I'm going to do everything I can to try to get it to do so anyway.  Saying it'll never pass and not doing anything to support it is the best and surest way to assure that your prediction comes true.

As far as progressive vs regressive, it is quite clear that the wealthy are big winners.  It's unclear about the poor, who benefit from EITC, but for argument's sake, let's call them winners too.  That means the middle class are the big losers.  That doesn't sound at all progressive to me.

As far as revenue goes, the first problem is that the "Fair Tax" ends the funding source for Social Security and Medicare, and a 23% with rebates for the poor is far short of what is needed.  The arithmetic is quite simple, really.  The general fund is severely underfunded already.  If any income class wins with the "Fair Tax", either a) another income class loses or b) the deficit grows even larger than it already is.

Seniors would of course have a conniption because you would be removing the funding sources for Social Security and Medicare.  They're not dumb - they know the programs will take a hit and they will fight it tooth and nail.  

In short, the "Fair Tax" is a Republican fantasy which collides with fiscal and political reality.

I signed the petition and signed up for the mailing list.

While this is not a discussion of the FairTax, your post shows you do not understand the FairTax at all.

As far as progressive vs regressive, it is quite clear that the wealthy are big winners.

 

Only to the extent that they are big losers under the current system.  No one takes a hit with the FairTax over the curent system.  Everyone benefits. Some may benefit more than others, but what is the problem with that?  Are you going to say no to taking home 10% more money just because your neighbor is taking home 12% more?

It's unclear about the poor, who benefit from EITC, but for argument's sake, let's call them winners too.  That means the middle class are the big losers.  

Even with the EITC, the poor are better off, and I'll show you how the poor and middle class will benefit at the end of this post.

If any income class wins with the "Fair Tax", either a) another income class loses or b) the deficit grows even larger than it already is.

Not true.  The FairTax significantly reduces tax evasion and cheating in addition to tapping into the underground economy.  When you expand the tax base, each part pays less.  It also frees up hundreds of billions of dollars lost from our economy every year just complying with the current tax code.

Seniors would of course have a conniption because you would be removing the funding sources for Social Security and Medicare.  They're not dumb - they know the programs will take a hit and they will fight it tooth and nail.  

Not removing, just streamlining.  There will be no change in social security funding.  Social security funding will come from the sales tax revenue, and you will still receive your checks when you retire.  This is really no different from what we have now except that the current social security tax is extrememly regressive.  

Currently, the government collects income tax and social security tax, spends some of the social security tax income on benefits, and adds the rest of the money to the income tax income and spends it all.  How is this different from collecting the sales tax money and spending it on social security and the rest of the budget?

In short, the "Fair Tax" is a Republican fantasy which collides with fiscal and political reality.

Actually, it is a non-partison endeavour supported by economists and financial experts across the country.

Comparison of the current tax code and the FairTax for a family of 4 at 3 different income levels.

A.    $25,000/year income -   Under the current system a family of 4 making $25,000 per year not only pays no income taxes, but receives a small rebate due to the earned income tax credit (EIC).  However, they spend all of their income on the basic necessities and have about 8% of their income taken out in payroll taxes.  The FairTax leads to a 22% increase in spendable income.

                    Current System          FairTax

Income                $25,000              $25,000

Income Taxes            - $0                   - $0

Payroll Taxes        -$1,912                  - $0

Embedded Taxes   -$5,471                   - $0

Sales Tax                   - $0             -$5,750

Rebate                   $1,780 (EITC)   $5,727

                         -----------         ------------    

Spendable              $19,397          $24,977

    Income

B.    50,000/year income - Under the current system a married family of four making $50,000 per year pays a small amount in income taxes in addition to payroll taxes.  The FairTax calculation assumes that they spend all of their income rather than saving any, which would reduce their sales tax reduction.  The FairTax leads to a 21% increase in taxable income.

                  Current System        FairTax

Income               $50,000           $50,000

Income Taxes       -$1,350         -      $0

Payroll Taxes        -$3,825         -      $0

Embedded Taxes   -$9,861         -      $0

Sales Tax               -    $0         - $11,500

Rebate                        $0            $5,727

                         ------------        ----------

Spendable Income  $34,964         $44,227

C.    100,000/year income - Under the current system a married family of four making $100,000 per year pays a significant amount in income taxes in addition to payroll taxes, even factoring in deductions.  The FairTax calculation assumes that they spend all of their income rather than saving any, which would reduce their sales tax reduction.  The FairTax leads to a 24% increase in spendable income.

                     Current System           FairTax

Income                 $100,000             $100,000

Income Taxes       - $10,630            -      $0

Payroll Taxes          -$7,030             -      $0

Embedded Taxes    -$19,507            -      $0

Sales Tax               -      $0             - $23,000

Rebate                          $0                 $5,727

                             -------------       ------------

Spendable Income    $62,833            $82,727

In every case, lower and middle class people make off much better under the current system.  The $100,000 income family might actually pay less in income taxes under the current system because if itemized deductions which the lower levels generally don't do.  All of these figures are available online at various calculation websites.  You can calculate payroll taxes at various income levels as well as projected income taxes at the 2005 levels.  The embedded taxes are based on the results of multiple studies at the Harvard University Economics Department which branched to Stanford University and several other major universities.

If you want to write your congressmen, you can find their e-mail addresses at:

http://www.visi.com/juan/congress/

We really appreciate your help.  Pass it along.

If a fetus is legally a person, then killing him or her is now murder, and I believe most states already have laws concerning that matter. Congress can define who is a citizen of the United States, that's what it needs to do here.

And no, I wouln't be satifified to leave the matter up to the states, any more than I would allow genocide in countries which choose to commit it. I'm principled that way.

if Roe vs Wade was abolished, you'd be in favor of a federal law outlawing all forms of abortion, and would find Federalist arguments about states' rights  in that context as irrelevant as they would be about murder. Correct?

Right effect, wrong rationale.

doh by azizhp

what is your rationale?

But that's not to say I wouldn't support a measure in which states would have a choice in the matter. We can worry about the states which still permit abortion on an individual basis afterwards.

what is your eventual goal, however? how do you square states rights with the larger moral issue?

States' rights are subordinate to universal human rights, i.e. the right not to be brutally murdered by your mother and her "docter".

Besides, when has states' rights meant anything other than "Black people as second-class citizens"? Strom Thurmand and, further back, the slave holders in the South used the same argument to defend a deplorable practice of either owning black slaves or mandating segregation.

 
Redstate Network Login:
(lost password?)


©2008 Eagle Publishing, Inc. All rights reserved. Legal, Copyright, and Terms of Service