When you're in a hole, stop digging.
Posted on 11/02/2005 9:43:45 PM PST by n-tres-ted
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.
I know the history. I just don't agree that nullifying an impeachable flouting of the Constitution--and that is what the EO was--makes the act a feather in Bush's cap.
When you're in a hole, stop digging.
The odds are already better that that in favor of the FairTax so you'd better start to educate yourself otherwise you'll contnue to sound totally uninformed.
Most people who look into the details of the FairTax are very much in favor of it. It really takes no "selling" if the one investigating has any sense.
"It does not require a majority to prevail, ...
Indeed something we tend to forget now and then.
A committed and vocal group is all that is necessary to roll the log in the right direction.
Key words: "His own tax reform advisory panel".
IOW, He got exactly what he wanted.
Don't despair. You make important points, but the most important point is Churchill's: Never, never, never, never give up.
I love to hear such prospects, and look forward to seeing them realized. I notice that the Senate passed the ANWR oil drilling authorization today, so we have to keep chiseling out success after success from the resistant granite of the Left.
If Republicans had balls they wouldn't need a frickin' commission and just get ur done!!!
Cowards.
I've totally given up on the GOP.
Oh come on. Take a breath. In Washington even talking about taking on SS is considered death.
He threw it out there and the usual cowards in the GOP balked. It's that simple.
Frankly, it's the voters, or non-voters, fault for not forcing the issue. Too many voters on every side think Soc Sec is sacred.
Bush at least started the dialouge. Complaining about the effort does nothing when no other elected pinhead will follow.
Yeah, right. Everyone just loves a graduated income tax and the IRS!
I'm always in awe every April 15th as the country cheers and celebrate.
Ah, another tax the rich Marxist.
How is lowering the rate mean paying less tax? When you tax something (income) at a higher rate you get less (income) to tax.
When you lower the rate you get more participation. The "rich" don't need income because they have wealth. Increase the rate of tax on their income too high and they'll just stop realizing gains and quit taking income. A higher percent of zero yields zero.
If you weren't so arrogant and actually did some research you'll find that every time the tax rate goes up the "rich" pay less of the overall taxes because, as I pointed out, they don't make income. But when you lower the rate (ala Coolidge, JFK, Reagan, GWB in our recent history but even more examples in times way past) in exchange for less deductibles you get more taxable income.
Just look at the recent 1990's and check out the IRS information on tax revenues. Clinton's income tax increases didn't create more revenue. It was the lowering of the capital gains tax rate by the GOP that put brought in all the money when we were running a one year (still a lie) "surplus".
Suggest you get a grip on reality.
Your flat tax/federal sales tax is politically impossible.
Given that - I don't really care how it's THEORETICALLY a great idea.
The flat tax will NEVER be accepted. People like the idea that People who make $1 million dollar pay more tax than someone who makes $50k.
I have a possible minor addition to it.
In it, you provide a link to a 2004 article posted by kattracks describing John Lewis Gaddis' assessment of President Bush's Grand Strategy.
Here's a link to the actual article by Mr. Gaddis...A Grand Strategy of Transformation
An absolute must read.
Geez, I've heard from people like you for years. Everything is impossible in your world.
I bet your father laughed at putting a man on the moon.
And with a flat tax someone making $1 million WILL pay more than someone making $50K. So you are mathematically challenged.
And you are horribly wrong. Everyone I've ever talked to about this issue think it's just fine if everyone paid the same rate. My parents are squishy libs and even they agree. My even more squshisy liberal brother that fell into the trap you're in for years preached the garbage you do. Then he grew up, got a good job and started making big money. He HATES the graduated income tax now.
So now I have fun pointing out he wants to "cut taxes on the rich" because he doesn't think he should pay a higher rate on more income. So you are not only incorrect but obviously devoid of the reality you accuse others of not living in.
The conservative movement has been successful for over 25 years winning elections convincing people of what you think is impossible to accept.
Just look at the Reagan tax changes of 1981. Lower rates (we had basically two tax rates) with a trade off of less deductions. No need to tax a higher rate when you let everyone deduct so much crap the tax code is impossible.
Grow up. Throw out your public education indoctrination and try and argue your points based on facts instead of childish emotions. You newbies are boring.
Ummmmm, I think you mistook me for poster #14, as I certainly did not complain about President Bush's effort.
My mistake...I took #14 and misread your comments in #18.
No problem ... just wanted the record set straight. ;*)
Disappointing.
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