While Bill "The Man from Hope" and Hill "The Woman from Park Ridge" Clinton are tag-teaming on Barack "The Man from the Audacity of Hope" Obama and John Edwards "The Millworker's Son" is trying to be a grownup, the muck is burying the really important stuff that people are concerned with such as the economy (collapsing housing market), the war, the economy (jobs), global warming, and the economy (the national debt). Did I mention the economy?
And to be fair, the other folks (The Republican 5 M's [the Mitt, the Mac, the Mike, the Mayor, and the M.D.]) are actually doing a better job about talking about issues (albeit, 9/11, building a wall, and fawning over the legacy of Reagan don't quite meet our needs either).
While the D's and the R's and the President are looking for ways to cut checks for "average" taxpayers, we should reflect that taxes, when used well, are not a bad thing. Taxes used to allow uninsured children to have healthcare = good investment, tax dollars to fund soldier benefits = good and fair investment, tax dollars to allow tax cuts to corporations and the top 15% of income earners = not such a good investment. Tax rebates might make sense if you've figured out a way to reduce government spending to pay for them--nobody has mentioned how that would happen.
If the proposed plan goes through, I imagine that the average American will use their rebate check to pay off some bills, rather than stimulate the economy. Rebates in the past haven't worked, except for political gain. This might help the banks out, but I guess I need more information to understand how this puts people back to work.
People of conscience can argue the relative merits of a flat tax, a national sales tax, or a progressive income tax, but when we have a choice between taking care of people who have been laid off who need a hand up and those holders of vast personal wealth who want a hand out, we should resist it; particularly when the check that is cut today, will be paid off by our grandchildren.
Some see a rebate from the government as just, given that it is our money. I argue that taxes, when they go to improving the basic quality of life, are an investment. I'm sure that the Paulites would disagree, but so be it.
The basic problem with taxation, as I see it, is that we are paying for stuff that we all don't agree with and that's what is so infuriating--but hey, democracy at work, right? Since we elect people who are supposed to be watching out for our interests (that's you--elected public officials) and they hire us (yes you--government workers) to help them, you would think that patriotic duty would include limiting the spending of crazy money on things that are poor investments--like wars.
So for the candidates of both parties, listen up! I want you talking about your plans to get the economy back on track. I would like to hear how your plans will allow us to take care of those in need, how you will not crush our young under the weight of a debt that will lessen their quality of life, won't get us into another war (or keep us in this one), and how you will lead us to share the burden. I don't expect you to do everything in four years, but I expect you to leave the blueprints behind for the next leader to pick up on. So come on, give a voter something to really cogitate on--spare the sparing, we already know you aren't perfect human beings.
Because, when you come down to it, economic justice is the road to all justice. We live in a country where pocketbooks and fear of risk or buyer's remorse decide elections. We like to reward excellence, but not excess. How about moving away from he said/she said and really talk about the important stuff.
Hey, eyes up here!
3 comments:
Because social justice is closely linked to economic justice, here's some input on both of the tax systems you mentioned, Huckabee's FairTax, and Bruce Bartlett's favored "flat' tax.
Close scrutiny of Gov. Huckabee's advocacy of the FairTax should convince one that it is, perhaps, the single most important policy position in this election. Research findings explain why:
The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces. [BHKPT]
The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan. [THBP]
Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case. [THBNP]
The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be. [ALM]
Consumption benefits [ALM]:
• Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.
• Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.
• The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.
• By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.
Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system. [KR]
Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively. [JK]
Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax. [THBPN]
Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20. [THPDB]
On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base. [TBJ]
The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent. [WM]
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Now, Bartlett has been naysaying a national retail sales tax in favor of an Armey/Forbes/Giuliani "flat tax" for years...
(Paraphrased) Reply by Dan R Mastromarco (LL.M., Taxation, Georgetown, principal in the Argus Group, adjunct professor at the University of Maryland, International Management Program, and research consultant to Americans for Fair Taxation - FairTax.org) to:
"A National Sales Tax Doesn’t Add Up" by Bruce Bartlett, December 29, 1999
Many engaged in true tax reform find Bartlett-type attacks exasperating, if not embarrassing. I'd like to convey perspective of both flat taxers and sales taxers who believe that such attacks are counterproductive, but first provide some political history by which to frame said perspectives.
For years Conservatives have posited that a VAT is bad policy (when liberals were discussing it), fearing it would become additional to an income tax (it was called a "money machine"). Circa 1980, conservative intellectuals touted Hall-Rabushka "subtraction method"[ H-R ] VAT which taxed business value added at the business side and labor value added at the labor side. Unlike European VATs (identical in scope), H-R became favorite of Dick Armey and Steve Forbes. It eliminated steeply progressive tax rates and tax on savings. Because of the prior VAT criticisms, H-R was packaged as the "flat tax" and is sold as an income tax to this day, rather than the VAT that its DNA characterizes it as being.
Some conservative commentators have called for the repeal of the 16th Amendment and for the adoption of the flat tax, (despite the fact that it is styled as a direct tax and could not be adopted with such repeal). Mr. Bartlett has called the national sales tax [ie, the FairTax] a VAT (which it isn't), castigated VATs as evil, and has said that sales taxes have become VATs in Europe (which they didn't). In the next breath, he "throws his arms around" the flat tax (which is a VAT). He quotes Bill Gale that the [FairTax] would have to be imposed at 60 percent, but glaringly fails to recognize that if the two bases are the same, he would have to impose that rate for the flat tax to be revenue neutral. In truth, all economists know that the two plans differ NOT in economic effect or base, but in administration.
An income tax taxes savings and investment multiple times. Both flat tax and FairTax are neutral as to savings and investment, tax income only once, and are both consumption taxes. Both are single rate taxes, have nearly the same base, and would improve the U.S. standard of living. Neither redistributes wealth.
While some have even suggested that hey are the same plans under different names, the flat tax taxes value added at each stage in the production process, but the FairTax prefers to tax it when it is added up at the end and eliminate the need to make everyone a taxpayer and collector.
Substantive commonalities between the flat tax and FairTax doesn't mean that there are NO key political and policy distinctions that could be exploited in pitting one against the other. If FairTax supporters wanted to retaliate in response to the Bartlett-type critique, they would have much material with which to honestly do so:
• The flat tax will make small firms and farmers pay the tax even if they have no profit
• The flat tax is opposed by many small business groups
• The flat taxers implicitly support big government by disguising even more of the overall tax burden as the current law
• The flat tax has been kicking around for nearly 20 years
• The flat tax makes everyone a taxpayer and collector, while the FairTax exempts 115 million filers [2000 figure] from ever having to deal with the IRS
• The flat tax is regressive, but the FairTax would enable everyone to keep his full paycheck.
• The flat tax has not only stalled, it has lost public and Congressional support.
• The FairTax is instantly understood, while even some proponents of the flat tax don’t understand it
• There are no transition rules developed for the flat tax and they would be very difficult to craft
• The flat tax taxes exports and relieves imports from tax
• The flat tax confuses tax reform with temporary tax reduction and makes both twice as hard
• The flat tax retains the entire income tax apparatus which erodes as quickly as you can say, “tax bill”
FairTaxers could advance these truthful points without resorting to bigotry associated with a cultic religious organization. However, for the most part, FairTax supporters have chosen not to attack the flat tax, but rather accentuate the commonalities between the plans - despite the above-noted differences. The reason is that, in the battle for tax reform, the real enemy is our current system.
Income tax advocates look down upon the articles of Bruce Bartlett with smug chortling, as Bruce is doing their work for them. The IRS and the liberals who want an income tax to ensure (1) taxes can be raised without the American people knowing it, and (2) wealth can be redistributed from the middle class to the poor, do not even need to fight us - we're killing ourselves!
Perhaps Mr. Bartlett believes that the flat tax will help elect Republicans, effect tax reform, and provide tax cuts; however, the real effect of his criticism is to divide conservatives, to delay serious national consideration of tax reform, and to fertilize the roots of the income tax.
( Source - Addit'l at FairTax.org Whitepaper - May republish in whole or part. - Ian)
Ian,
I'm not so sure that the FAIR Tax is fair. Check this out:
http://www.populist.com/08.02.dispatches.html
‘FAIR TAX’ DOESN’T ADD UP. One of Mike Huckabee’s selling points is the “Fair Tax,” a plan to replace the income tax and Internal Revenue Service with a national sales tax. Ron Paul, Duncan Hunter and Alan Keyes are other GOP candidates who support “Fair Tax,” which we consider tax reform for people with poor math skills. Although advocates say the “Fair Tax” would replace all federal personal and corporate income taxes, Social Security and Medicare taxes and estate taxes with a 23% sales tax on practically all transactions, including health care, new houses, rent and groceries, they already are fudging the numbers. The plan, which was drafted into a bill by Rep. John Linder (R-Ga.), levies a tax of 30 cents on each dollar spent. Most of us would call that a 30% tax. (It’s 23% of the $1.30 total.) But the Institute on Taxation and Economic Policy (itepnet.org) figured that the sales tax would have to be between 45% and 53% to replace income tax revenue. Congress’ bipartisan Joint Committee on Taxation, says the rate would be 57%. And while the bill would do away with the IRS, it would replace it with another agency with the authority to audit any personal or business transaction in the country as well as track personal income in order to issue half a trillion dollars in rebates on taxes paid up to the poverty level. The bottom 80% of taxpayers would face much higher taxes under a national sales tax, ITEP found. Nationwide, these tax increases would average about $3,200 a year. In contrast, the best-off 1% of all taxpayers nationwide would get average tax reductions of about $225,000 each per year.
Well, you've got people that are seeking alternatives to a frankly bad system income tax system that, in the process of revenue collection, games the code for political and monetary gain (subject to corruption and favoritism). I've provided links to research, and there clearly is a difference in assumptions, but I'll stick with the key researcher whose work is highly visible - unlike the President's Tax Panel who have yet to provide Dr. Kotlikoff with the methodology that will support their declarations of these higher rates.
While this will require more investigation to sort out, on the face of it, would you rather keep the level of interference and politicization of the tax code? or do we want something less complex, more understandable, and easier to comply with?
My bet is that the people will not be opposed to ALL Americans participating in the country that supports them, instead of continuing this never-ending pitting of poor against rich, as our country deteriorates economically and globally.
But then, there are those who believe that this is the design to bring about a North American Union and the Amero monetary unit.
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