The DNC my response to a fellow blogger's comments on a national sales tax
Friday, February 11, 2005
The DNC and Howard Dean
I'm not in a discussion with anyone on this issue, just wanted to editorialize a bit while it was fresh on my mind. I am a Democrat and would characterize myself as a liberal (proudly). I was not, however, a Deaniac. I think he's smart, I think he's interesting, and I think people of a variety of political bents listen to him because he doesn't pull any punches. I do think, however, that he's left of my viewpoints. I was not in support of our invasion of Iraq. Having gone through the process, however, and thusly invaded, I don't think it's right on either a moral or political basis to "pull out". I never thought that message would resonate in the 2004 campaign. Most Americans recognize that a course taken cannot be untaken. On a personal level, I don't confuse the "war effort" with the "warfighters". Persons in service to our country, following orders and potentially paying the highest price are to be revered and respected. Always. Period. They didn't choose to invade Iraq. That responsibility lies with the Administration and the Legislature. I won't go into that angle in this post - suffice it to say that summarily pulling out of Iraq, leaving a country we turned on its head with no assistance and in chaos would be repulsive and decidedly unAmerican.
Having said that, I think the choice of Howard Dean to lead the DNC is both surprising and potentially invigorating. Now is the time for Democrats to stand for their values - to draw a line in the sand and not compromise and not abandon Democratic principles. If nothing else, Howard Dean won't shy away from a fight and Democrats are standing together as they seek to recapture, election by election, the hearts and minds of Americans. While I may disagree point by point with some of Mr. Dean's views, I can't argue that he has them and will defend them. I hope the same for his abilities when defending those of the larger Democratic party.
Tax Reform
Every time we, as a nation, start discussing "tax reform" and "tax simplification", the specter of a national sales tax arises in some quarters. I am not an advocate of excess on any front. Excessive taxes are bad. Excessive tax cuts are bad. Excessive protectionism is bad. Need I go on? I don't believe that the wealthy in this country should bear an excessive tax burden. However, I do believe that those who benefit most, financially, from being an American owe a fair share back to the system which enabled their success. A national sales tax works in complete opposition to that basic belief in that it is wholly regressive. If, as some espouse, a national sales tax would simplify the tax code, then the logical conclusion is that there are NO exceptions to the sales tax. Use as an example two identical people. They live in the same area, are the same gender, and buy the same amount of products. They both have the same basic needs (ala Maslow's Hierarchy) - food, clothing, shelter, safety, etc. The only difference between these two individuals is their income. One makes four times as much as the other. Yet, by this example, they pay EXACTLY the same amount of taxes. The person with lower income has less disposable income left to save, to send their children to college, to pay for healthcare and for anything unanticipated which comes their way. They can't realistically stop eating to save that money. They can't realistically wear fewer clothes to save that money. The person with the higher income effectively gets a tax break with this example that allows them to get further and further ahead while the person with the lower income can't ever seem to come out on top, widening the class and income gap.
Why should someone who makes $37,500 a year pay roughly the same in taxes as the person who makes $150,000 a year?? If you say, then, that the solution is to exempt necessities, then you have to legislate what constitutes a "necessity". Is ground beef a necessity but steak not? Are bananas a necessity but kiwis not? Is a car a necessity vs. a luxury? If you buy your clothes at Wal Mart are they tax-exempt vs. buying them at The Gap? Is a home made out of brick a luxury compared to one with aluminum siding? You get the point - it's trading one series of complications for another in an effort to keep the system fair. And that, by its nature, is essentially unfair.
We are a nation of optimists. People come here because they believe that if they work hard they can secure a better future for their children and generationally improve ownership, investorship, and entrepreneurship. Not true with a regressive tax system, though. A more reasonable approach is a flat tax on income. The percentage would be the same, no exceptions, no credits, no exemptions for individuals or corporations. That would be simple, and proportionate. There are even models out there that show how it could work. You might think that it requires a high percentage that disproportionately burdens the lower income brackets, but that doesn't need to be the case with the closure of high-income and corporate tax loopholes and shelters. I'm not a fan of the "loophole pander" - there are a lot of credits and incentives, both corporate and individual, that are frivolous and frankly unethical. But there are others intended to stimulate very noble items: fuel efficient cars, for one. Energy-efficient corporate innovation, for another. Volunteerism and charitable giving.
The net result is that a national sales tax is regressive and unfair and therefore unconscionable. A flat tax rate, while simpler, is trading simplicity against innovation, inventiveness, and giving. The tax code can be simplified but it will never be simple. And, as long as we allow lobbyists and special interests to corrupt our political system, it will never happen. The answer to a great deal of our ills is to rid the political system of special interest money and let public servants return to that for which they were elected - to serve the public.
posted by RenaRF @ 4:06 PM,
2 Comments:
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At 5:18 PM,
Hill Billy Rave said...
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Rena, It's Friday and I'm not going to argue my point...I'll make further comment later. Here, go to www.fairtax.org look it over and see what you think. I'll give a hurther explanation later.
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At 2:00 PM,
Hill Billy Rave said...
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Further, not huther. About the National Sales tax, food is not exempt because eatng out is not a nescasity. Wealthier earners tend to eat out more, therefore, the writers of the bill(HR25) made food non exempt. However; each earner would receive a monthly check compesating for taxed nescasities. This check would be at a rate for their incomes. (let me try some HTML) www.fairtax.org Looking under get smart, you'll find some FAQ.
The tax rate would be around 20-25% of the good. The more you spend, the more you pay. Obvious. This could help lower income workers. Now, in economics, prices alway's go to an affordable rate or people stop buying. Prices on goods would even out. And since you get to keep what you earn, and your employer is not forced by law to be tax collecetor, this will help to firther empower people and biusnes's.
The currrent tax system is ridden with loop holes, The Fair Tax get's rid of them...you spend, you pay. Simple. Government would have incentive not to meddle with the economy or lose tax revenue. As for a Flat Tax, contries like Chile have used it well. They also made liberal banking laws and freed up property rights. (they received no foreign aid)Still with a flat tax there is room for code, and code begets loop holes. Government is still free to raise the rate for their spending spree's. Further, $10 dollars to the lower income means as much as $30 for someone earning more.
A National Sales tax would empower the people, encourage a strong economy and elimanate loop holes. We earn our money,We deserve to keep it and not have it taken from us with out our control.
Rena, thank you for linking me, If i get the links figured, I'll link you too. Till next time, be sweet.