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Since wannabe Republican candidate and book tour personality Herman Cain put his 9-9-9 plan (later discounted to a 9-0-9 plan) out there, other wannabes have been tripping over each other and themselves to get their “newest and most improved” tax plan out.
In all fairness it must be noted that Willard Mitt Romney did already have a 57 page economic plan, which included mostly more of the same standard Republican loophole filled taxes and some cuts, as befits the true moderate that Romney is. But since Texas Governor James Richard “Rick the Hair” Perry has literally pulled a postcard size ersatz “tax form” out of his pocket and said “that’s all we need folks”; it looks like Romney is going have to do some serious editing and come up with his own version of a flatish style tax plan, complete with a version of the 1040EZ.
Michelle Bachmann, who often tells us she was a tax attorney before becoming Ms. T-Party 2011 (January through August) is working on a plan that is all loopholes with cuts to tally a zero sum. Gingrich is writing a 400 page treatise on why the tax code is currently so long and a 500 page one on how to shorten it. Old crazy “Uncle” Ron Paul says – we don’t need no stinkin’ tax code; charity and churches will come up with the money to help build roads and maintain the small Army (which is all we really need). No one can find Rick Santorum. And Huntsman liked New Hampshire so much, he is thinking about staying there and running for Governor, on the Democratic and Socialist Party tickets.
But Cain’s 9-something-9 plan appears to be losing all its credibility under serious scrutiny. Even after the modifications which take into account that the poor don’t have enough to house, feed and clothe their families, yet alone anything to give to Uncle Sam above and beyond their mandatory S.S. and Medicare contributions. And so it will be with virtually any flat or flatish tax plan. Because after you come up with an acceptable bottom number below which no taxes are owed, and apply that equally to all taxpayers regardless of income; you are left with only the top 50% of tax payers having to provide all the tax revenue – just as we do now. But if the middle class who have any disposable income left, all the way up to the filthy stinking rich, then have to pay the same percentage; either the middle class will be paying more than they really can afford or the upper class (economically speaking) will be paying much less than they can afford – much the same things stand now.
The idea that those who make a lot more than almost everyone else should pay a higher percentage of that income (as in our current and long standing progressive tax system), while not appearing to entirely fair in the sense of equal; has a kind of fairness about it in the sense of being practical in a common sense way. If poor folks pay anything above the basic unavoidable withholding, their quality of life will be noticeably diminished; as in they may have to choose between eating and needed medication. When even middle class people are forking over a percentage of their income that is either equal to or even (slightly) less than the rich; they too will suffer a life quality of reduced opportunity; like choosing to put their kids through college or keeping decent roof over their head if they get to retire. But if the rich people of this country pay their taxes at a higher rate, their standard of living will exhibit virtually no change at all. If you make a million dollars a year and take home either $700K or $650 grand; you can still afford a pretty decent home or two and the car of your choice.
The extra $50K in taxes represents about a 5% increase for the uber wealthy, and it still leaves them with a load of bucks. But the very, very rich have had the Republicans in Congress go to mat for them, when President Obama wanted to eliminate the Bush tax cut which was just a messily 3% up-charge. In fact the Reps are (unbelievably) fighting with the administration over tax increases of less than 1% for their constituents making over a million bucks a year, which is targeted to be used to create hundreds of thousands of jobs for unemployed Americans.
It’s starting to dawn on most American that the supposed “job creators” are telling their Republican (and some Democrat) Congressional “employees” that they want their cake and to eat it too. No matter how low their taxes are, or how many or how big the loopholes are; the richest want to get richer by having their taxes lowered, even if it means cutting essential services for those who are not rich because their jobs were outsourced by the alleged “job creators”. Americans are seeing that the only jobs the multinational tax dodgers create are in China.
Meanwhile, the Reps are still thinking it’s easier to raise a million dollars at 100K apiece from 10 rich donors, then to raise the million at 10 bucks each from a hundred thousand ordinary people. But the fallacy in their reasoning is that the 10 high rollers may not be able to buy the all votes that the 100K ordinary, hard working, honest Americans have. The math says 100,000 votes is a lot more than 10. And common sense says when they stop and think about it for a minute; those 100K voters know a flat tax under which they pay the same percentage of their income, which they really need, as a fat cat who could afford 5 or 10 percent more without even noticing it (except on paper), isn’t really “fair”. And so a progressive income tax seems a “fairer” way of raising revenue in the common sense way most people in this country understand.
But even more than the too small percentage discrepancy in tax percentage between middle class and rich Americans that most voters are becoming aware of; the staggering loss of what should be tax revenue suffered by 99% of us through the loopholes, tax breaks and giveaways amounting to no less than corporate welfare, that is justifiably infuriating Americans. A huge subsidy amounting to billions for Big Oil & Gas, whose profits are already in the tens of billions, is an outrageous outright theft from the people of this country. The Agribusiness/Ethanol Subsidy Scam is more of the same, as are dozens of other unneeded instances of our money being given to the very wealthy as rewards for the money they ply our politicians with. The tax credits for shipping good American jobs overseas are only adding more insult to injury. Every nickel they wealthy dodge and don’t pay of what they owe in taxes; has to be made up for by the rest of us.
The scheme proposed by some Republican candidates to allow multinationals to bring back their profits which they are keeping overseas at either a 5% or even 0% tax rate is just the latest trick they are trying to play on American taxpayers. These companies aren’t investing any of their money in America. They want this money closer to home so they can either stuff it in their pockets (virtually tax free) or they are afraid that they might lose it in whatever country they have it stashed to some dictator or the mob that overthrows him. These corporations with no real national allegiance should either bring their money home and pay what they duly owe or they can take a chance on losing it all with their new international partners. Either they are and are willing to pay their fair share and shoulder the responsibility and enjoy rewards as good corporate American citizens, or they are operating and profiting beyond the laws of this country and should be treated as what they really are. Rewarding the bad behavior of hiding income overseas by giving them a huge tax break to bring it here for their own use is like letting a bank robber keep most of the money and not go to jail, if he gives some of it back; a very bad precedent to start.
Corporate taxes have gone from about 25% of American’s total income tax revenue down to about 6% over the last 20 years. This has been accomplished through a whole boat load of creative accounting practices that have been allowed under changes to the U.S. tax code, courtesy of the bought and paid for members of the U.S. Congress. And still corporate execs and their pet politicians talk about the tax rate being too high. They also talk about eliminating the capital gains tax so that once you make money, anything you do with that money to make some more, will be tax free. So despite special privileges and all the arcane aspects of the tens of thousands of pages of tax code that only apply to the wealthy; they, through their Congressional minions, are asking for a tax rate every bit as low as a wage earner who has none of the opportunities to avoid or evade tax liabilities the wealthy are given. That doesn’t sound fair, because it is nowhere near fair. The rich pay a lot more in taxes because they have a whole lot more of the taxable money made in this country. If they were to pay fairly, without the tricks afforded them, they would be paying even more; but not all that much more. Certainly not more than they could afford without any real diminution of their very high standard of living.
No matter what kind of new tax scheme, scam or plan the Republicans (or Democrats for that matter) running for office try to slip by us between now and the 2012 election; we have to look at it very, very carefully to see who really benefits from it. Sure we need tax reform in this country. But we had better be sure that it really is reform and that the reform is aimed at righting the wrongs and inequities that are presently in place. In fact getting rid of the whole shootin’ match of the U.S. Code and putting together a small, simple set of goal oriented rules would arguably be the best approach. A new, fair and uniformly applied code would protect people at every level of income from being overtaxed. It would also eliminate the corruption which would allow anyone to be under-taxed. Everyone would be required to contribute something, even if it’s just the basic contributions that are now in place. It would probably result in a straight forward, very few step, progression with virtually no deductions (excepting perhaps other taxes) and all sources of income being considered the same. The money made from working is not worth more or less than that made from investing; income is income, period.
Fairer revenue collection is an essential part if fixing the U.S.’s budget problems. Fair taxation coupled with a safe, clean 21st century energy policy and pro-American trade policies designed to put all Americans back to full time work will allow this country to not only endure, but excel as it has traditionally done.
