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WSJ: Tax Reform Revisited
Wall Street Journal ^ | September 13, 2004 | Editorial

Posted on 09/13/2004 5:20:15 AM PDT by OESY

...President Bush is beginning to promote the cause of tax reform.

In his New York convention speech, Mr. Bush laid down the broad principles that tax reform must satisfy. With a friendly nod toward the desirability of home ownership (read the mortgage deduction) and charitable giving, he called for "a simpler, fairer, pro-growth system." And he's promised to appoint a bipartisan advisory panel to generate specific ideas.... Consider:

Simplicity. The current system with its deductions, exemptions and credits -- many of which phase-in and then phase-out at different income levels -- piles complexity on complexity....

Fairness. Right now, the tax burden falls unevenly. In the big sense, it stretches the principle of vertical equity, otherwise known as progressivity....

Workers who pay no taxes or a very little share may be indifferent about voting tax relief for others and are insulated from recognizing the true costs of government.

...Depending on the composition of a particular taxpayer's household, Americans with identical incomes pay wildly different taxes....

Pro-growth. It's hard to imagine a tax code that is less sympathetic to growth. Currently, the system levies a tax on saving and investing and its steep progressivity discourages risk-taking. The result is a chronically low savings rate and much less entrepreneurial activity than we might have. That, of course, translates into lower productivity and weaker economic growth....

They all know that every year the sneaky Alternative Minimum Tax reaches further down into the ranks of middle-income taxpayers. In just six years, somewhere between one-quarter to one-third of all taxpayers will be liable to pay the AMT, which snares tax filers who qualify for such large deductions as the one for state and local taxes....

There are several possible reforms to explore, ranging from a flat tax to some kind of tax on consumption....

(Excerpt) Read more at online.wsj.com ...


TOPICS: Editorial; Government; News/Current Events; Politics/Elections
KEYWORDS: alternativeminimum; bush; flattax; healthsavings; irs; taxreform

1 posted on 09/13/2004 5:20:15 AM PDT by OESY
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To: OESY

The demoncrats biggest issue. If this president pushes for a NRST and gets it, then the demoncrats biggest issue is virtually blown away. What will they do? What will they have to whine about then? Military service issues?..we are seeing how well they do on that this past week.


2 posted on 09/13/2004 5:34:32 AM PDT by crz
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To: OESY
In 1986 I saw two pie graphs side by side in a major newspaper. One represented the revenue of the US and the other the expenses. On the expenses graph all welfare and public disbursements were represented by a slice. On the revenue side, the federal income tax and FICA were separate slices but displayed side by side.

Public disbursements and fed/FICA were within few thousand dollars of being the same amount. The visual communication was clear. The reason we have the income tax and FICA is for the socialist programs and for no other reason.

Socialist programs and the number of those served by them can only grow, so the only "tax reform" possible is one that will furnish the federal/national government more money.

3 posted on 09/13/2004 5:43:59 AM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
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To: ancient_geezer

Tax reform ping


4 posted on 09/13/2004 10:45:09 AM PDT by Dementon (I hear the voices in my head, I swear to God it sounds like they're snoring...)
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To: Taxman; Principled; Bigun; EternalVigilance; kevkrom; n-tres-ted; Poohbah; CliffC; ...
A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a retail sales tax:

H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

Refer for additional information: http://www.fairtax.org & http://www.salestax.org


5 posted on 09/13/2004 12:28:46 PM PDT by ancient_geezer (Equality, the French disease: Everyone is equal beneath the guillotine.)
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To: ancient_geezer
Let's hope for public discussion of the nrst.

It's predictable... when people learn about it, they overwhelmingly want it.

Geez, what's the stat? 80% or something?

6 posted on 09/13/2004 1:26:41 PM PDT by Principled
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To: Principled

Freedom from the income tax BUMP!


7 posted on 09/13/2004 1:31:37 PM PDT by EternalVigilance (Abortion: The American Holocaust.)
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To: William Terrell
Socialist programs and the number of those served by them can only grow, ...

I disagree. The reason they keep growing is
a) people don't perceive their tax burden, so don't balk at more freebies
b) the tax burden is unequal among voters. So you get pols taxing one group to buy votes from another group.

The nrst resolves both of these problems.

Folks will feel their tax burden daily.
All of us will pay the same rate on purchases.

BTW US exports finally would compete worldwide on a more level playing field.

8 posted on 09/13/2004 1:38:46 PM PDT by Principled
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To: Principled; ancient_geezer
Why don't we spend the 50-some days between now and November 2 debating it?

That's the question the WSJ winds up asking. I think it's just as well that we spend the next 50 days debating the issues of war and peace and prosperity. When the WSJ is so ill-informed of the details of the Fair Tax Act (available for years), we could not educate the people in the hullabaloo pre-election. We must get our president re-elected, and then on to real reform. Bill Thomas will do a great job informing the WSJ and others when he gets to turn full attention to reform.

9 posted on 09/13/2004 3:47:47 PM PDT by n-tres-ted (Remember November!)
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To: Principled
I doubt that most people relate the socialist programs to the tax burden. The ones I talk to think it's needed to run the federal/national government.

Socialism offers the greatest grant of power to those that run a government. The only way to remove socialism in the US without armed conflict is to defund it. The only way to do that is to get rid of the income tax/SS and replace them with nothing.

10 posted on 09/13/2004 4:11:00 PM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
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To: William Terrell
I dunno if that's the only way William.

I think changing the way we fund the beast will do some good. Eliminate withholding for one.

11 posted on 09/13/2004 4:52:32 PM PDT by Principled
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To: Principled
It's a cinch that the people won't rise up and smite the socialist systems in place. As I claimed in my first post, it's being funded by income/SS taxes. In 1986, the funding just covered the expense. I suspect the system is hurting today.

From my observations, the income tax has reached its limit on this funding. The tax is on income and can be avoided; growing numbers are doing it.

If the income tax is raised much more, there will be masses refusing to pay it, using one technique or another, and the IRS is already spread thin. I think those in the belly of the beast know that.

The nrst, being on the consumption end, raises the revenue to the feds and is much harder to avoid. If my life or political philosophy were in any way tied to socialism, I would be campaigning for it.

12 posted on 09/13/2004 5:24:04 PM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
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To: William Terrell
It's a cinch that the people won't rise up and smite the socialist systems in place.

What they'll smite is paying for it. Of course, they always have paid for it, but didn't realize it. When they see how much it costs, we'll all have an attitude adjustment.

From my observations, the income tax has reached its limit on this funding.

IRS own figures put consumption over what is reported for income!

The nrst, being on the consumption end, raises the revenue to the feds and is much harder to avoid.

It is harder to avoid, but it raises the same amount of revenue - not more not less - not sure what you were saying there...

And if I thought this would not combat socialism as fiercely as I think it does, I would not support it.

13 posted on 09/13/2004 5:56:54 PM PDT by Chilldoubt
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To: Chilldoubt
IRS own figures put consumption over what is reported for income!

Got updated figures on this?

...it raises the same amount of revenue

not anymore. at 23 t/i it raises more than they're getting now. the rate can be lowered.

14 posted on 09/14/2004 6:36:12 AM PDT by Principled
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To: Chilldoubt
It is harder to avoid, but it raises the same amount of revenue - not more not less - not sure what you were saying there... And if I thought this would not combat socialism as fiercely as I think it does, I would not support it.

I don't think you understand. Federal income tax and FICA fund the socialist programs. The social security system is the foundation of the socialist programs. The programs can not exist without the tremendous amounts of money generated by these two taxes. If either one were to bite the dust, the socialist programs would have to go under, too.

In HR25, as in HR2525, the social security system payouts are guaranteed by two of its provisions. If we go to a NRST, those programs, in financial jeopardy now, will be financed into perpetuity because the consumption tax will generate much more revenue than the income tax does now.

Very few proponents of the NRST on this forum are socialist, or have a socialist bent, but the end result is a socialist expansion, regardless.

15 posted on 09/14/2004 9:10:06 AM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
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To: William Terrell

I don't think you understand - the reason we have those (expensive) socialis tprograms is in large part due to the fact that people don't know how much tax they pay - if it's free, why not take it?

But when folks really know how much they pay, they will want to pay less.

So while hr25 does keep social security, there is no more withholding or any more silly "employer's share"... everyone sees the cost whenever they buy something...95% of "hidden, embedded" taxes are put out into the open for us all to see.

don't misundertake (lol) me - i'm not trying to convince you to change your mind - i only want you to see why i think hr25 will stop the bleeding. THEN we can start lopping off huge chunks of spending. that's the big reason the liberal dems hate this idea so much.

at least we have the same goal - or so it seems


16 posted on 09/14/2004 4:57:29 PM PDT by Chilldoubt
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To: Chilldoubt
People know how much tax they pay. It has been incrementing from about 1% up to what it is now. They are used to it because that's how people are. It won't take two months them to get used to the nrst.

We have the socialist programs because people are conditioned to think they need them. They are paid for by fed and FICA, and the politically tolerable limit has been reached.

To save this system, a new approach, without the limits of the old one, has to take the place of the old one. Miraculously, the very tax system appears at the very time when it's need to keep the public tit filled.

Government is sure blessed of God, don't you think?

People already want to pay less taxes.

17 posted on 09/14/2004 6:40:36 PM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
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To: OESY

NRST won't happen without repealing the 16th amendment, and the 16th amendment won't be repealed.

I also think a flat tax or other major reform is DOA, because of the usual interest groups.


18 posted on 09/15/2004 4:22:27 AM PDT by nsc68
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