Nonsense as Usual: Bush Contention that Tax Reform Is Key to Manufacturing Competitiveness

AmericanEconomicAlert.org ^ | Wednesday, April 14, 2004 | Alan Tonelson

[gipper81]

"Visibility is the key" - maybe the key to you, but implicit in your argument is trusting the politicians to do the right thing tax-wise. I'm simply not going to take that step.

Count me as a supply-sider in favor of a flat tax as low as possible, with no capital gains taxes and no taxes on dividends.

[EternalVigilance]

"Visibility is the key" - maybe the key to you, but implicit in your argument is trusting the politicians to do the right thing tax-wise. I'm simply not going to take that step.

That is what you are doing, in effect, through your de facto support for the status quo. The FairTax is the only form of taxation that deals with this issue at all.

Count me as a supply-sider in favor of a flat tax as low as possible, with no capital gains taxes and no taxes on dividends.

The flat income tax is dead politically. We've had a ten-year long debate within the GOP between the flat tax and the NRST, and the NRST won that debate some time ago.

You're about five years behind the curve.

[TheMightyQuinn]

Both the House and Senate versions of the NRST stipulate that a two thirds majority is needed to raise the tax rate; a simple majority can decrease the tax rate.

Awesome!

How about 2/3 needed to raise the tax rate, and 1/3 to lower it? hehehe.

[phil_will1]

"Count me as a supply-sider in favor of a flat tax as low as possible, with no capital gains taxes and no taxes on dividends."

This is an interesting post, coming as it does on a thread dealing with our problems in the manufacturing sector. The Flat Tax, with its perpetuation of the corporate income tax and the payroll tax, does nothing to address one of the biggest shortcomings of the current tax system, which is that it puts US producers at a decided disadvantage vs foreign counterparts, not only in many foreign markets, but in our own domestic market as well.

As Dick Armey, the father of the Flat Tax has said, it takes too great an effort to overcome the status quo to do it and get the wrong answer. I agree with that sentiment totally. However, I disagree totally with what the right answer is.

[phil_will1]

I agree totally with the author's central thesis that tinkering with the tax code isn't going to have much impact on the jobs problem or the manufacturing problem. However, what the author didn't say and should have said is that Fundamental Tax Reform is really the only policy option that the federal government has which would have much of an impact. Implementing the FairTax would have major benefits in both of these areas and there really isn't any other alternative which would have a comparable impact. The reasons have been addressed very well by other posters, so I won't be redundent.