Bakersfield Republican has winning tax plan Bush, Senate outfoxed with compromise

The San Francisco Chronicle ^ | Thursday, May 22, 2003 | Carolyn Lochhead, Chronicle Washington Bureau

[Ernest_at_the_Beach]

Washington -- A wily Bakersfield Republican who strikes fear among friend and foe on Capitol Hill has out-maneuvered the White House and Senate Republicans on President Bush's premier domestic policy: the elimination of the tax on corporate dividends.

It will be Bill Thomas' reduction of the tax on dividends and capital gains -- not the elimination of the dividend tax that Bush introduced with tremendous fanfare in January and has lobbied for ever since -- that will be in a $350 billion, 10-year tax cut package agreed to Wednesday that Bush will tout as his signature domestic achievement this year.

[Ernest_at_the_Beach]

And here is some more surprising news (to me at least):

Special interests lose out in tax bill (Now this is BIG News )

[kellynla]

We have done the numbers and with a 15 per cent sales tax is what is needed. And if you don't have to pay any income tax and only pay tax on what you buy YES I believe people would love it! Think about it. You sit down and do the math on what you buy in a year and how much you pay in income taxes. Half of the population pays no income tax now!

[muleskinner]

All Your Tax Cut Are Belong To Us

[Always Right]

You only get 15% if you keep the Socicial Security tax and you tax all goods, including food. And I think 15% is the 'tax-inclusive' rate, which really translate to a 17.6% tax.

[The Old Hoosier]

There is nothing fair about a tiered tax rate that is based on income earned by the person!!!

There isn't a new tiered tax rate. Cap gains taxes are already tiered at 20 and 10. Now they will be tiered at 15 and 5, which is a lot better.

[kellynla]

Well even 17% is not 40%. What you said earlier. And I say start at 15% and see where we are. As it is now the top 10% earners pay more than half the federal income taxes or anyone who makes $53K a year or the top 25% pay 84% of the federal income taxes. I still like the national sales tax.

[John Valentine]

I still like the national sales tax.

So do I. It is fair, easy to adminster, it taxes consumption not savings, it is pro-growth, it makes everyone pay something- no freeloaders, it will tax the "underground" economy, and it eliminates a huge federal bureaucracy.

Your estimate of 15% is probably about right. 17.5% might be needed if we couldn't get at the garage sales, flea markts, hookers and drug dealers, but we will get those revenues, and 15% will be enough.

[Sonny M]

I'm very skeptical of a national sales tax, in that, alot of places will add on top of that, a local sales tax and a state sales tax (I live in NYC, I would have to do all my shopping totally over the internet then). Also, my other fear, is that it would eventually be revamped into a VAT system, which makes it easier to raise taxes with it only looking like a price increase. I prefer a flat tax, simply because its simpler and its easy and less room for shenanigans, though states and locals will still add there own income taxes, but with a flat taxes, if times go bad, or whatnot, you can always use somthing as a stimulus (i.e. a temporay tax exemption on somthing).

[John Valentine]

The flat tax has its advantages, to be sure, and it would be entirely acceptable to me in preference to the system we have now.

It would not do anything to tax the underground economy, however. I agree with you that we would need to be vigilant over time to make sure that the National Sales Tax didn't morph into a VAT, which would open the door to a new income tax in addition to the sales/VAT tax revenues. Then we'd have the worst of both worlds.

[Sonny M]

Thats my fear, everytime I hear about national sales Tax, the first thing I think of, is future VAT. Unlike the liberals in europe, our libs are alot more sneaky and conniving and eventually can "call for reform" or argue that we need to look at new streams of revenue for whatever program is convenient. National Sales Taxes have a weird way of becoming VATS, and can be pumped up, over and over again, without the consumer knowing, and by making it look just like a price increase.

I like the flat tax, but one thing that I also like, but dislike, is the ability to still use tax exemptions. If another recession comes, you can cut it, or apply alot of credits or exemptions (temporarily) to boost the economy, the only downside, which is still here in the current system, is people who will try to use it for social enginering.

[John Valentine]

...people who will try to use it for social enginering.

You got that right! That's the number one problem with the complicated income tax. Ninety percent of it is not about raising money, but about raising money from CERTAIN PEOPLE. And doling it out to the mascot classes.

As long as the flat tax code can be fully written down in 10 point double spaced New York on two sheets of 8 1/2 x 11 paper, and never grow to three, Im down with the flat tax, but you know and I know that as long as there are votes to be bought, there will be a hunger for the money with which to buy them.

That is most of what politics is all about these days; stealing money from the first group to buy votes from another group to vote against the interests of the first group. Needless to say, this should get the first group pretty worked up, so the key is to make them feel guilty or powerless or both.

This is harder to do with a flat tax, so you can put money on who is going to crawl out of their festering holes to cry that this is a tax on the poor, a tax break for the rich and all the rest. The socialists will scream like they have been stuck with red hot pokers.

Let them. This needs to be done.<p. Then we will need to remain vigilant and our kids will need to remain vigilant that the bloodsuckers don't find another tender stretch of financial flesh to stick their fangs into...