Wednesday, September 29, 2004
How Bush plans to raise your taxes.
Do you make more than $200,000 a year? Have lots and lots of investments? Maybe a trust fund? Good for you! The rest of us, however, have some really good reasons to be suspicious of President Bush's interest in a national sales tax and the elimination of estate, capital gains, and dividend taxes. Why? We're gonna pay the bill. (Not to mention the Medicare and Social Security bills. I'm going to need quite the raise!)
Robert S. McIntyre explains (sub req'd):
Bush and his aides have dropped hints about the specific kinds of tax changes he wants to pursue. Speaking at an “Ask President Bush” event in Florida in August, Bush called the replacement of most federal taxes with a national sales tax “an interesting idea that we ought to explore seriously.” At another such campaign forum in Ohio in September, Bush called scrapping personal and corporate income taxes in favor of a flat-rate wage tax “certainly one option.” Explaining why Bush believes that both a flat tax and a national sales tax deserve consideration, aides emphasize that the president likes that such plans would essentially make interest, dividends, profits, and capital gains tax-free.
Like me, you probably depend on a paycheck rather than investment income. Being a Gen-Xer sans inheritance in a nonprofit service profession, I'd say that I make, oh, 0% of my annual income from investments, capital gains, and interest. (I'm looking forward to changing that, but as my, er, portfolio expands one thing I'll keep in mind is how amazingly lucky I am to have a portfolio.) We know that Bush's policies will do nothing to help me — or you. But it gets worse:
Of course, exempting most of the income of the wealthy from taxes and dropping graduated rates in favor of a single tax rate has to be a huge cut for the rich. Because Bush promises no net revenue loss, how much more will everybody else have to pay? My organization ran the numbers on a national sales-tax bill introduced in Congress — the idea Bush found “interesting” — and found that it would saddle middle- and low-income families with average tax increases of $3,000 to $4,000 a year. We’ve done studies of the effects of a flat-rate wage tax, too, with similarly frightening results.
If you don’t want to believe me, listen to what Bush’s own Treasury Department had to say in a 2002 memo about switching to a flat-rate wage tax or sales tax. Such change “would necessarily reduce the tax burden on high-income individuals” and would be “unlikely to result in a tax as progressive as the current tax system.” Or, if you’d like something even more straightforward, listen to the original authors of The Flat Tax (an idea later promoted less honestly by Dick Armey and Steve Forbes), who admitted: “Now for some bad news. ... [I]t is an obvious mathematical law that lower taxes on the successful will have to be made up by higher taxes on average people.”
A person would have to be living deep in denial to think that the country can keep all of Bush's tax cuts. Somebody is going to have to pay for Bush's extraordinary handouts to corporations, his expensive war, and his expanded entitlement programs. It shouldn't be a burden the rich shift entirely onto the shoulders of the working and middle classes — but that's what Bush wants to do.
("Now for Some Bad News," Robert S. McIntyre, American Prospect 10.04, sub req'd)
Copyright © 2004 by Philocrites | Posted 29 September 2004 at 10:39 PM