Saturday, December 01, 2007

There's one for you, nineteen for me

Jeebus, the flat-earthers flat taxers are at it again. And isn't always the case that the wealthiest wankers like Steve Forbes back in 2000, who got their money the old-fashioned way, by inheriting it, shout the loudest about Teh Flat Tax.

As expected, Right-wing candidates for President are jumping on the bandwagon. Michael Kinsley in the L.A. Times has issues with that idea:
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. But for people who get a lot of deductions now, the simpler tax would be a higher tax. How many people, do you suppose, would choose simplicity over complexity, even if simplicity would cost them more? My bet: approximately zero.

Like most flat-tax advocates over the years, Thompson puts a thumb on the scale by combining flatness with a large tax cut. The Congressional Joint Committee on Taxation figures that Thompson's plan would fall a mere $2.5-trillion short of revenue over the next decade, compared with the current system. If you can borrow $2.5 trillion, it makes it easy to arrange for more people to see their taxes go down than up if they choose the flat-tax alternative.

Fredrick of Hollywood never fails to go down the road of movement conservative hackery, and ideology; Tax = Bad. The summary of Thompson's radical idea:
The real strategy of Thompson's plan is a familiar one from past Republican tax plans: Give large breaks to business and the wealthy (such as abolishing the estate tax), bribe the middle class to go along by offering smaller breaks to them, and don't worry about paying for it all.

Hokay. The Grover Norquist wing of the Republican Party will love that idea, except for it not going far enough.

And what about Mikey:
Mike Huckabee, currently enjoying his 15 minutes, makes a slightly different political mistake, which we might label, for lack of a better term, "total honesty." He has endorsed something called the Fair Tax proposal, which involves repealing all federal revenue sources -- the income tax, Social Security tax, estate tax, everything -- and replacing them with a 23% sales tax on everything except education. The Fair Tax propaganda says it is intended to be "revenue neutral." That is, it would bring in just as much money as the taxes it replaces.

This makes it easy to figure who would win and who would lose. It's a zero-sum game: Every dollar someone's taxes go down is a dollar someone else's go up. What you spend every year is the amount you earn minus the amount you save. On average, Americans save practically nothing, but wealthier people save more. Very poor people actually spend more than they earn, while Bill Gates and Warren Buffett couldn't spend more than a small fraction of their income. So wealthy people are going to see their taxes go down, which means that poor and middle-class people are going to see their taxes go up.

And of course this fits with Right-wing ideology, since it's the trickle-down theory dressed in new clothes, but it's still as shabby a concept as always.

I recommend reading the whole article, but here's Kinsley's strike-out pitch:
Neither Thompson nor Huckabee has anything useful to say about the real problem, which is the huge gap between revenues and spending that President Bush, having inherited a surplus, is leaving behind. Thompson's willingness to take on Social Security would earn him some points for courage if he were planning to use the money to reduce the deficit or address the entitlements problem. But he wants to pour the money into new tax cuts for business, which is not just a bad idea but an incredibly lazy one. There's more to running for president than buying a round of drinks at the country club and asking what's on people's minds.

Meanwhile, Huckabee's revenue neutrality at least would not make the problem even worse. For this, the business wing of the Republican Party is hysterically labeling him a "fiscal liberal."

. . . Actually, the spending debate is over, or should be. The GOP bluff has been called. Republicans had six years in which they controlled the White House and (for most of that time) Congress. They could have cut any spending they wanted. They did the opposite. None of the realistic Republican presidential possibilities is discussing spending cuts except in the vaguest terms.

But if you peer into the abyss of debt and say that what this country needs is another tax cut, that makes you a good conservative

Really, these candidates are sad. Oh, and scary.