Novak: Bush's tax non-reform

WASHINGTON -- George W. Bush's chances of engaging the country with a dynamic second-term initiative were sabotaged this week. His own tax reform advisory panel Tuesday reported two plans exceeding the worst expectations. Not only would they be dead on arrival if actually sent to Congress, but they probably stifle President Bush's hopes for seriously reshaping how Americans are taxed.

The President's Advisory Panel on Federal Tax Reform created 10 months ago released its report Tuesday, and it turned out to have precious little to do with what Republicans think of as reform. Instead of a low flat tax, it proposes a high graduated tax. It retains pretty much intact the dysfunctional Internal Revenue Code. It does not entertain the slightest possibility of a national sales tax.

Having named a commission to make recommendations instead of using his own administration to devise a plan, Bush faces this dilemma. He can either buy into a reform that is going nowhere or, alternatively, disregard his panel's work and start from scratch. It is unlikely the graduate of Harvard Business School who now occupies the Oval Office would take the unconventional latter approach.

What the panel came up with is hard to believe. The two options propose four and three tax brackets, respectively, with top rates of 33 percent and 30 percent, down from the present 35 percent. Even Lord John Maynard Keynes, no supply-sider, said 25 percent is the highest acceptable rate. The measly rate reductions were added belatedly by the panel, which intended to retain 35 percent until it found its plan generated enough extra money to make cuts and still keep the package revenue neutral, as the president requested.

The extra revenue results from repealing deductibility of state and local taxes, ending tax-free health insurance supplied by employers and capping home mortgage deductions. While largely leaving alone the Revenue Code's maze, the panel rips into three of the most popular tax benefits.

This strange product results from the panel, instead of recommending a new tax framework, concentrating on one specific -- and expensive -- goal: to eliminate the Alternative Minimum Tax (AMT), estimated to raise taxes of 21 million people in 2006 and 52 million in 2015. When the 1986 tax reform failed to clean up the code and many zero taxpayers remained, the AMT was instituted.

Thanks to inflation, AMT covers so many upper-middle-income taxpayers that its elimination has become one tax cut favored by Democrats. But why would a Republican president's commission lock into a Democratic priority? Because the Bush panel's dominant figure is former Sen. John Breaux of Louisiana, a Democrat with a reputation for compromise but a record of partisan loyalty.

Breaux's Republican co-chairman is former Sen. Connie Mack of Florida, who ran with supply-siders on Capitol Hill but now seems most interested in cancer research. Hopes that the panel's membership would recommend real tax reform plunged when Bush appointed a third legislator: 77-year-old former Rep. William Frenzel of Minnesota, who as the House Budget Committee's ranking Republican in the '80s was the bane of supply-siders.

Most disheartening for reformers about the presidential panel is what it omits. It does not include the innovative, daring plan of Sen. Jim DeMint of South Carolina for an 8.5 percent retail sales tax and an 8.5 percent business transfer tax on companies. Yet, Bush has declared a "sales tax is an option we should consider seriously."

"Rather than giving the president a sales tax option," said Lawrence A. Hunter, chief economist of the Free Enterprise Fund, "the panel took it upon itself to decide for the president, limiting his options. That isn't what the panel was supposed to do." DeMint's plan, of course, would eliminate the AMT, as would any far-reaching tax reform.

When Republicans in 1994 assumed control of Congress, the party's leaders assured me that tax reform would be high on their agenda. In 11 years, however, Republicans have not begun to resolve conflict between a flat tax and a sales tax. Bush as president ignored the issue until this year and then named a commission instead of drafting a proposal. What emerged this week suggests that the president and the Republicans have squandered a precious opportunity.

Robert Novak is a television personality and a columnist who writes Inside Report.

"Bush hasn't accomplished much of anything that has been good for America since he was elected. Just add this to the list."

Oh, brother...

Presidency of George W. Bush -- the first 48 months

President Bush signing a federal ban on Partial Birth Abortion

Banned Partial Birth Abortion

Reversed Clinton's move to strike Reagan's anti-abortion Mexico Policy
Stopped foreign aid that would be used to fund abortions.

Supported and upheld the ban on abortions at military hospitals

Signed E.O. reversing Clinton's policy of not requiring parental consent for abortions under the Medical Privacy Act

Killed the Kyoto Global Warming Treaty

Killed U.S. involvement in the International Criminal Court

Killed Clinton's CO2 rules that were choking off all of the electricity surplus to California

Killed Clinton's "ergonomic" rules that OSHA was about to implement; rules that would have shut down every home business in America

First Missile is Installed For NMD on July 23, 2004
Killed the U.S. - CCCP ABM Treaty that was preventing the U.S. from deploying our ABM defenses

Built ten ABM silos in Alaska and California so that America has a defense against North Korean nukes
Killed the Comprehensive Nuclear Test Ban Treaty so that the U.S. can once again test our nuclear weapons
The Commercial Space Launch Amendments Act (less romantically known as H.R. 5382) ultimately allows average Americans to hitch a ride on a civilian space craft at their own risk. The federal ban on such citizen travel was repealed by HR 5382 in 2004. The President signed that bill into law two days before Christmas.
President Bush pledged to Israel on 4/14/2004 that it could keep parts of the West Bank, giving international legitimacy to Jewish settlements there
Denied Palestinian refugees any right of return to what is now Israel, saying they should be resettled in a future Palestinian state instead
Part of coalition (Russia, Israel, EU, Palestine, USA) for Israeli/Palestinian "Roadmap to Peace"
Pushed through THREE raises for our military

Increased Defense Dept funding which had deteriorated during the previous 8 years
President Bush's Grand Strategy (click here)

President Bush's Environmental Record - 2004 (click here)
Signed TWO bills into law that arm our pilots with handguns in the cockpit

Currently pushing for full immunity from lawsuits for our national gun manufacturers

Ordered Attorney-General Ashcroft to formally notify the Supreme Court that the OFFICIAL U.S. government position on the 2nd Amendment is that it supports INDIVIDUAL rights to own firearms, NOT a leftist-imagined *collective* right

Told the United Nations we weren't interested in their plans for gun control (i.e. the International Ban on Small Arms Trafficking Treaty)
Signed the 2004 Omnibus Budget 1/26/2004 that now MANDATES that gun buyers' background check information be fully and permanently destroyed within 24 hours of the completion of the check, no matter what.
Repealed Gun Controls Against Active, Retired, and Off-Duty Law Enforcement Personnel Carrying Weapons Into Local and State Prohibited Zones (7/28/2004)

Enacted powerful tort reform legislation that moves many class action lawsuits from state to federal courts. Requires federal courts to hear cases where the amount of the dispute is more than $5 million, and when the defendant and any of the plaintiffs live in different states.

Disarmed Libya of its Chemical, Nuclear, and biological WMD's without bribes or bloodshed
Won an agreement that U.S. Navy sailors may now freely board thousands of commercial ships in international waters to search for weapons of mass destruction under a landmark pact between the United States and Liberia, the world's No. 2 shipping registry (signed Feb 11, 2004), and Panama 5/10/2004 http://www.nytimes.com/2004/05/11/international/americas/11ship.html).
Approves The First U.S. Counter-Intel Plan

Successfully executed 2 wars and rebuilt 2 nations: Afghanistan and Iraq. 50+ million people who had lived under tyrannical regimes now live in freedom...epitomized by their own free and democratic elections.
Provided Billions in aid, machines, and manpower to tsunami victims.

Executed a WAR ON TERROR by getting world-wide cooperation to track funds/terrorists (has cut off much of the terrorist's funding and captured or killed many key leaders of the al Qaeda network)
Bush Administration diplomacy led to the 5/25/2004 peace accord that ended a massive 20-year civil war between Sudan's Islamic north and Christian south after two million deaths Click Here
Delivered vital emergency aid to millions of survivors on multiple continents (e.g. Africa, SE Asia) of a devastating Tsunami caused by a 9.1 earthquake near Sumatra.

Brought back our EP-3 intel plane and crew from China without any bribes or bloodshed

Started withdrawing our troops from Bosnia and has announced withdrawal of our troops from Germany and the Korean DMZ.

Signed the LARGEST nuclear arms reduction in world history with Russia

Initiated comprehensive review of our military, which was completed just prior to 9/11/01, accurately reported that ASYMMETRICAL WARFARE was critical.
Created NATO's Rapid Response Force
Changed the tone in the White House, restoring HONOR and DIGNITY to the Presidency

Reorganized bureaucracy...after 9/11, condensed 20+ overlapping agencies and their intelligence sectors into one agency: the Department of Homeland Security.

Initiated discussion on privatizing Social Security and individual investment accounts.

Improving govt. efficiency with .8 million jobs put up for bid...weakening unions and cutting undeserved pay raises. Wants merit based promotions/raises only.

Orchestrated Republican control of the White House, the House AND the Senate.

Killed the liberal ABA's role in vetting federal judges for Congress.

GWB signed an executive order enforcing the Supreme Court's Beck decision (re: union dues being used for political campaigns against individual's wishes)

Turned around an inherited economy that was in recession.

Passed tough new laws to hold corporate criminals to account as a result of corporate scandals.

Signed 2 income tax cuts ---- 1 of which was the largest Dollar-value tax cut in world history

Reduced taxes on dividends and capital gains

In process of eliminating IRS marriage penalty.

Increased small business incentives to expand and to hire new people
Eliminated the Estate Tax (AKA "Death Tax") that was taking small farms and businesses from families

Signed into law the No Child Left Behind legislation delivering the most dramatic education reforms in a generation (challenging the soft bigotry of low expectations)

Reorganized the INS in an attempt to safeguard the borders and ports of America and to eliminate bureaucratic redundancies and lack of accountability.

Signed trade promotion authority

Committed US funds to purchase medicine for millions of men and women and children now suffering with AIDS in Africa

Passed Medicare Reform (authorized $39.5 Billion per year for preventive medicine such as drugs and doctor visits as well as included a ten year Privatization option)

Urging federal liability reform to eliminate frivolous lawsuits

Supports class action reform bill which limits lawyer fees so that more settlement money goes to victims

Submitted comprehensive Energy Plan--awaits Congressional action (works to develop cleaner technology, produce more natural gas here at home, make America less dependent on foreign sources of energy, improve national grid, etc.)

Endorses and promotes The Responsibility Era ("In a compassionate society, people respect one another and take responsibility for the decisions they make in life. My hope is to change the culture from one that has said, if it feels good, do it; if you've got a problem, blame somebody else -- to one in which every single American understands that he or she are responsible for the decisions that you make; you're responsible for loving your children with all your heart and all your soul; you're responsible for being involved with the quality of the education of your children; you're responsible for making sure the community in which you live is safe; you're responsible for loving your neighbor, just like you would like to be loved yourself. " -----this quote was too good to leave out)

Started the USA Freedom Corps

Initiated review of all federal agencies with a goal to eliminate federal jobs (completed September 2003) in an effort to reduce the size of federal gov while increasing private sector jobs.

Challenged the United Nations to live up to their responsibilities and not become The League of Nations ( in other words, completely irrelevant)

Nominated strong, conservative judges to the judiciary.

President Bush opened up an additional part of Alaska for domestic oil drilling. In 2004, the National Petroleum Reserve, an area west of the existing Prudhoe Bay field, was approved for new energy exploration and production.
Increased U.S. Oil Drilling Permits 70% Above Clinton-era
Changed parts of the Forestry Management Act to allow necessary clean-up of the national forests in order to reduce fire danger.

As part of the national forests clean-up, the President restricted judicial challenges (based on the Endangered Species Act and other challenges) and removed the need for an EIS (Environmental Impact Statement) before removing fuels/logging to reduce fire danger.
New Forest Rules Gives States Power Over Federal Forests Inside Their Borders
Significantly eased field-testing controls of genetically engineered crops.
President Bush signed the workplace verification bill to prevent hiring of illegal Aliens
S. 1685, the Basic Pilot Extension Act of 2003, was signed by President Bush on December 3, 2003.
It extends for five years the workplace employment eligibility authorization pilot programs created in 1996. It expands the pilot programs from the original five states to all 50 states.

U.S. Forces In Baghdad

2nd Term Supplimental (incomplete)

Broke the Chinese Yuan to Dollar currency peg

CAFTA - President Bush signing CAFTA

Bolton to the UN

Has CONSTRUCTION in process on the second group of eight ABM silos in Alaska and California so that America has a land-based defense (in addition to our sea-based SM-3 and AEGIS systems) of 18 ABM's against North Korean nukes (note: China itself currently only has 24 -out of several hundred- nuclear ICBM's capable of reaching the U.S.)

Energy Bill (new tax cuts...after 5 years of opposition)
Immunity For Gun Manufacturers From Crime-Related Lawsuits
5% unemployment
3.4% annual (after inflation, 5.5% actual) reported GDP Growth

Syrian Troops forced to withdraw from Lebanon

http://www.rferl.org/featuresarticle/2005/07/933f746d-c5d8-491a-bd7c-566de1b66135.html Russians Troops Peacefully Withdraw From Georgia

Brought North Korea to the Negotiating Table and won their agreement to dismantle their Nuclear Weapons Program

Chief Justice John Roberts

Dramatically improved U.S.-India relations via a breakthrough nuclear agreement

Signed Bankruptcy Reform Into Law

Waived Make-Work Enviro Studies For New Oil Drilling

Full Immunity From Frivolous Lawsuits For Our Domestic Gun Industry
Click Here

Fed Chairman Bernanke

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