December 1, 2007

AT LEAST HE GETS THEIR COURAGE RIGHT:

Simple Gifts: The problems with Thompson's and Huckabee's tax plans. (Michael Kinsley, Dec. 1, 2007, Slate)

The American tax code is hideously and needlessly complex. People say they want something simpler. Now two Republican presidential candidates are probably committing political suicide by offering people what they say they want.

The central gimmick of Fred Thompson's recently announced tax plan is to offer people a choice. They can pay taxes under the current rules—with some juicy new breaks added from the big and small businesses wish lists—or they can pay a so-called "flat tax," with lower rates and fewer deductions. So, anyone who wants a simpler tax code could have one. [...]

Like most flat-tax advocates over the years, Thompson puts a thumb on the scale by combining flatness with a large tax cut. The nonpartisan Tax Policy Center figures that Thompson's plan would fall a mere $2.5 trillion short of revenue over the next decade, compared with the current system. Two and a half trillion to play with makes it easy to arrange for more people to see their taxes go down than up if they choose the flat-tax alternative.


While he means it ironically, spread over a ten year chunk of American GDP, $2.5 trillion is pretty "mere." It's also rather easy to make most of it up by cutting defense spending back down to peacetime levels and hiking gas consumption taxes to a serious level, even if you don't get the accelerated economic growth and resulting tax revenues that seem likely.

Posted by Orrin Judd at December 1, 2007 8:51 AM
Comments

Any politician that proposes a serious gas tax (and I'm for it if combined with income tax reduction) is DOA, so the point seems moot.

Posted by: Patrick H at December 1, 2007 11:21 AM

Republicans would be well served NOT building a cut into such a plan.

The right has been so successful at tax cutting that there are no longer enough constituencies that are clamouring for cuts. The "stupid rich"
(50% of the top 5% are trending left) are no longer concerned with Federal Income taxes.

By advocating "dramatic" changes that are "revenue neutral" (an impossibility, given the dyanamic nature of 300 mil. marginally free people), Republicans can keep the "low tax" mantle with out the "fiscally irresponsible" label attached to it.

Huckabee's embrace of the "fair tax" would be smarter if the "Fair tax" crowd wasn't so mendacious about lying about the 23% rate (it's 30%) and the nonsense about "getting rid of the IRS."

Take Soc. Sec. out of the fair tax calculalation, drop the tax to an honest 20%, and fix Social Sec. through personal, portable accounts still tied to income.

Your idea about gas taxes is brilliant of course, but it can't be proposed in a two party system because the one party will destroy the first person/party to propose it. You need a third/independent party to successfully get the .50 to $1 tax that is needed.

I find it hilarious that every one is so impressed with "traingulation," but fails to understand that the disaffected citizen who no longer votes (or votes rarely) is a defacto '3rd party' voter who comes out of the wood work when offered something other than the same limp 2-party crap.

A credible, well-funded, Conservo-Green-3rd way independent (Kasich-Gringrich comes to mind), running on a 50 cent/gallon Gas Tax, 20% Fair Tax, Individualized HSA/Social Security, anti-corruption platform, would give both parties a real run for the money in 2008.

If they cost the Republican the election, it would be worth it because the outpouring of "new" voters would put Republicans back in control of the house, and possibly even the senate (though it's probably too tough a year for that).

But alas, our empire is too long in the tooth to entertain such dynamics any longer. Better to 'Stay the course' and let our "debt culture" receive the necessary bail-outs from opaque Chinese and Arab hedge funds.

Posted by: Bruno at December 1, 2007 11:35 AM

Only the dead have seen the last of war.

Posted by: Lou Gots at December 1, 2007 12:22 PM

You should hold on to your wallets everytime a lefty like Kinsley quotes a "non-partisan" think tank on taxes.

The real elephants in the room regarding taxes are the AMT and the expiration of the Bush tax cuts. The Democrats haven't faced those questions yet because their primary voters don't want to embarass the candidates. But Charlie Rangel knows that the voters in NY are just liable to slide a bit towards the GOP if the AMT continues to metastisize. Likewise, when the electorate as whole is told that the Democrats want to raise everyone's taxes at a time when the deficit is all but disappearing....

The GOP has 11 months to work on the middle class with respect to taxes. For starters, the ads should ask if voters remember Bill Clinton's promise to cut taxes in 1992, and then his 'sudden' tax increase in May 1993.

Posted by: ratbert at December 1, 2007 1:05 PM

OJ:

The problem is precisely what Patrick says: No politician who wants to get elected will ever propose increased gas taxes out loud. You seem to understand the occasional sticking points of democracy when you point out that, with 70% of the public in favor of a prescription-drug benefit regardless of cost, we were going to get it eventually whether conservatives liked it or not. The constant drumbeat around here for increased gas taxes when the same circumstances apply is comical.

Posted by: Matt Murphy at December 1, 2007 5:56 PM

Couple the two and it's easy.

Posted by: oj at December 1, 2007 8:57 PM

OJ:

Imagine you're a politician. Try explaining to the voters that they shouldn't believe the negative ads about you hiking their gas prices because, after all, that proviso came with some delicious pork products on the side. I don't think so.

Like you say, gas is the new bread. No politician wants to be even remotely responsible for expensive gas.

Posted by: Matt Murphy at December 3, 2007 7:34 PM

You just link it to Islamophobia and it sells itself. Though you might need to wait for the next attack...or stage one...

Posted by: oj at December 3, 2007 11:12 PM

OJ:

In other words, it will work until elected Democrats feel that enough time has elapsed for them to begin bitching about how we're killing our enemies and alienating the world. Last time that took, what, seven months at most?

Posted by: Matt Murphy at December 4, 2007 2:57 PM

But the stuff approved in the hysteria proved irreversible.

Posted by: oj at December 4, 2007 5:22 PM

OJ:

That's because it was useful terrorist-targeting stuff of little interest to anyone except hysterical civil libertarians.

The average American thinks the anti-Patriot Act folks are kooks because no one in his family or neighborhood has heard jackboots at the door (and it's just a riot listening to liberals pretend otherwise). Gas taxes are different: Everyone feels the pain.

Posted by: Matt Murphy at December 4, 2007 11:39 PM

The main reason for the current malaise is that so little was asked of us that we aren't vested in the war. Raising gas taxes as a military tactic would have let folks feel they were contributing to victory.

Posted by: oj at December 5, 2007 6:58 AM
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