This page was last updated on March 21, 2010.
A real test; Editorial; Beaver County Times; March 21, 2010.
The editorial states, “The tax code has been made ever more complex by presidents and members of Congress who have used it to promote social policy.” Duh. That’s been the purpose of the federal income tax since its inception. If it weren’t, we’d have a flat sales tax.
The editorial asserts, “Most Americans and businesses would benefit from a simpler tax code.” That’s true, but what immediately follows is not. The editorial continues with, “Klein reports that if Wyden and Gregg can pull this off, the average corporation and taxpayer would pay quite less while revenue would hold steady. How would that be possible? Because the tax breaks, loopholes, exemptions and exclusions that pollute the tax code at present would be eliminated.”
It would be nice to know Ezra Klein’s definition of “average.” The last I heard, what “the average corporation and taxpayer would pay” is total tax revenue divided by the total number of taxpayers. If “revenue would hold steady,” the average would remain the same unless there were a significant increase in the number of taxpayers. To make it so “the average corporation and taxpayer would pay quite less” could happen only by significantly increasing the number of “low-income” taxpayers. According to The Tax Foundation, the typical family of four making $51,000 or less pay no federal income tax. That report goes on to say “recently released IRS data for the 2008 tax year show that a record 51.6 million filers had no income tax obligation. That means more than 36% of all Americans who filed a tax return for 2008 were nonpayers.”
Remember, “the tax breaks, loopholes, exemptions and exclusions that pollute the tax code at present” include income-dependent tax rates, the standard deduction, the mortgage interest deduction, deductions for charitable giving, the so-called earned income tax “credit,” exemptions for dependents, and so on.
The editorial continues, “Klein notes that those most likely to oppose reform are ‘a tiny group of beneficiaries who are committed to preserving their sweetheart deals.’ (We can already envision the scare-tactic television and radio ads.)” There’s a lot more than “a tiny group of beneficiaries” who benefit from income-dependent tax rates, the standard deduction, the mortgage interest deduction, deductions for charitable giving, the so-called earned income tax “credit,” exemptions for dependents, and so on. Finally, note how the Times is already laying the foundation for accusing its opponents of scare tactics.
The simplest way to deal with the tax issue is to replace all federal taxes with a flat sales tax.
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