Tuesday, August 23, 2011


Greg Sargent wants to paint Rick Perry as a tax extremist -- which is valid, because Perry is a tax extremist. However, as I'll explain below, I'm not sure Perry's more of a tax extremist than anyone else who's likely to be on the GOP ticket next year:

If I were one of the reporters covering Rick Perry's campaign travels, I'd try to make some news by asking: Do you still stand by your proposal in your book to repeal the 16th Amendment and replace the income tax with an alternative tax system? Do you still believe your book's claim that 16th Amendment is "the great milestone on the road to serfdom?"

...The book ... does in fact contain specific policy prescriptions on the income tax. In it, Perry declares that the 16th Amendment represents "the great milestone on the road to serfdom" because it represented "the birth of wealth redistribution in the United States."

Perry clearly states that "we should restrict the unlimited source of revenue that the federal government has used to grow beyond its constitutionally prescribed powers." How? Here’s what Perry suggests, in addition to scrapping the current tax code:
Another option would be to repeal the Sixteenth Amendment to the Constitution (providing the power for the income tax) altogether, and then pursue an alternative model of taxation such as a national sales tax or the Fair Tax.
I've been asking the Perry campaign since last week if he still supports this idea, and haven't gotten an answer....

But how extreme is this in the modern GOP? As National Review Online notes:

... Jon Huntsman implemented a flat tax of 5 percent in Utah, Newt Gingrich has expressed support for a near-flat or an optional flat tax in the past, and Michele Bachmann is at least open to a flat tax.

And that nice, moderate, right-centrist Mitt Romney?

... in Plymouth, N.H., [on August 15], Romney made [this] statement...: "The proposals that I'll be putting out this fall will talk about bringing our tax rates down, both at the corporate level and the individual level, simplifying the tax codes, perhaps with fewer brackets. The idea of one bracket alone would be even better in some respects," Romney said.

He went on to stress that he didn't want to provide tax cuts to the rich ..., but it's hard to see how "the idea of one bracket alone" is anything other than a flat tax.

Bachmann, by the way, favors a radical reworking of the tax code:

In a profile in The Wall Street Journal, Bachmann says she loves the FAIR tax proposal but just cannot bring herself to back it in the House.

"If we were starting over from scratch, I would favor a national sales tax," the three-term Minnesota congresswoman says. But the reality is that if it were enacted, the chances are "we would end up with a dual tax, a national sales tax and an income tax."

Bachmann says her tax plan would be to take corporate rates down from 35 percent to nine percent and "zero out" capital gains tax, the alternative minimum tax and the death tax.

But she says the main problem with the U.S. tax system is that nearly half the population pays nothing. She says all deductions should be abolished “because there is no tie to the government benefits that people demand.

"Everyone should have to pay something," she insists.

Ron Paul has proposed a 10% flat tax.

Herman Cain is a passionate Fair Tax fan:

Herman Cain ... talks about the ways the FairTax plan would supercharge the U.S. economy sooner rather than later.

* The FairTax plan will replace the federal income and payroll based tax system with a simple, transparent and fair national retail sales tax.
* You will bring home your entire paycheck, and then you decide when and how much you pay in taxes when you spend your money.
* Taxes are assessed at the retail, or consumption, level so businesses will be able to compete globally.
* The ability of politicians and lobbyists to manipulate the tax system to benefit themselves and their interests goes away under the FairTax plan.

The flat tax eliminates progressivity, of course -- but are you following how a Fair Tax/national sales tax would not merely be less progressive than the (somewhat) progressive income tax we have now, but overtly regressive? Think about it: If you're poor or lower middle class, you probably have to spend every dime you take in just to survive. (You don't "decide" to spend your money, as Cain says. You really have no choice, unless you want to forgo such luxuries as food, clothing, and shelter.) But the wealthier you are, the less you need to spend, and the more you can save or invest. If the government taxes only what you spend, it taxes 100% of the earnings of the poor -- and a far smaller percentage of the earnings of the rich (except the biggest spendthrifts among the rich).

That's an almost perfectly regressive tax.

Oh, and that nice, mainstream Marco Rubio -- the most likely #2 on any GOP ticket?

RUBIO: ...We should be the party of tax reform. We're constantly talking about tax cuts and their importance, but tax reform is even better. Change our system of taxation, whether it's a Fair Tax or a Flat Tax.

Eliminating the income tax seems like an extreme idea, but it's about to become very, very mainstream very, very quickly. I'd love to believe that liberals, the Democratic Party, and centrist pols and pundits are prepared to explain why this is a horrible idea, but I'm guessing that, as usual, the Overton window is about to be moved quite far to the right before non-righties even know what's hitting them.

1 comment:

Anonymous said...

Ron Paul introduced a bill in the House eight times since 1997 to abolish the income tax. He had 4 co-sponsors back in '07. http://www.govtrack.us/congress/bill.xpd?bill=hj110-23
Michelle Bachmann has never co-sponsored this bill with Dr. Paul.