Simp and Simpler
Fred Thompson and Mike Huckabee want to 'simplify' the tax code -- which is not to be confused with improving it.
By Michael Kinsley
Washington Post
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. But for some of them (people who get a lot of deductions now), the simpler tax will be a higher tax. How many people, do you suppose, would choose simplicity over complexity, even if simplicity will costs 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 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. But this has nothing to do with simplifying the system. If you don't care how much debt you run up, you can give everyone a tax cut without bothering about simplification. You can stop collecting tax at all! That would be nice and simple.
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.
But maintaining your indifference to the size of the bill you are running up requires nerves of steel. You must never waver, never never express the slightest concern that lost revenue may be a problem, and never never never even hint at where you might go to find the money. Thompson followed the script, putting out word that the explosion of economic activity after his tax reform would bring in too much money to even count, yadda yadda yadda. Then, unfortunately, he blinked. He revealed that he is a political amateur by making ominous noises about finding some savings through changes in Social Security benefits , which has to mean cuts in Social Security benefits or no money will be saved.
(Continued here.)
By Michael Kinsley
Washington Post
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. But for some of them (people who get a lot of deductions now), the simpler tax will be a higher tax. How many people, do you suppose, would choose simplicity over complexity, even if simplicity will costs 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 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. But this has nothing to do with simplifying the system. If you don't care how much debt you run up, you can give everyone a tax cut without bothering about simplification. You can stop collecting tax at all! That would be nice and simple.
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.
But maintaining your indifference to the size of the bill you are running up requires nerves of steel. You must never waver, never never express the slightest concern that lost revenue may be a problem, and never never never even hint at where you might go to find the money. Thompson followed the script, putting out word that the explosion of economic activity after his tax reform would bring in too much money to even count, yadda yadda yadda. Then, unfortunately, he blinked. He revealed that he is a political amateur by making ominous noises about finding some savings through changes in Social Security benefits , which has to mean cuts in Social Security benefits or no money will be saved.
(Continued here.)
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