Bush Might Well Include Tax-Overhaul Push (flat tax but w/ home int deduct

[papau]

Wall Street Journal Washington Wire item should be digested in full: "TAX CODE'S OVERHAUL is on table for second Bush term. It could be the 'big idea' some advisers want for the campaigning president. They say he wouldn't be specific until after re-election — much like Reagan in 1984. The need to cut deficits and reform 'alternative minimum tax' that's hitting middle-class 'will be the driving force for tax reform, no matter who's elected,' says Bill Hoagland, fiscal adviser to Senate leader Frist. Rumors Bush will seek a 'flat tax' stir Realtors, who fear it would mean an end to mortgage-interest deduction. Their lobbyist calls Congress' Republican leadership offices, which contact White House. Realtors reassured after White House signals: 'Message delivered.'

http://online.wsj.com/public/article/0,,SB109175136412784613,00.html?mod=todays%5Ffree%5Ffeature


August 6, 2004


POLITICAL CAPITAL
By ALAN MURRAY

Another Bush Term Might Well Include Tax-Overhaul Push (flat tax but w/ home int ded)
August 6, 2004; Page A2

As the Bush administration prepares for the Republican convention in New York this month, it is borrowing yet another page from the book of Ronald Reagan. Tax cuts are for the first term; tax reform is for the second.

Speaking on CNBC's Capital Report Wednesday night, Republican Senator Sam Brownback of Kansas said President Bush is committed to "a growth platform" for the coming campaign, and predicted "you'll start hearing him talk about a flat tax, really getting the tax code out of so much impact over people's lives." That fits with recent comments by House Speaker Dennis Hastert, who writes in his new book, "Speaker," that an important goal for the next four years should be changing "our present tax system and adopting a flat tax, a national sales tax, an ad valorem tax, or a VAT (value-added tax)."

Administration officials are keeping mum about their second-term proposals, and the platform for the GOP convention has yet to be crafted. Still, they acknowledge that tax proposals are on the table. And while a full-blown flat-tax isn't in the cards, a tax-reform plan that moves in that general direction may well be.<snip>

The devil, of course, is in the details. And you can bet there won't be many details before Election Day. In 1984, Ronald Reagan got a cynical laugh from members of Congress when, in his State of the Union address, he called on Treasury Secretary Donald Regan to give him specific recommendations for overhauling the tax code by December -- one month after the election. Count on George Bush to do the same. He may start talking about a pro-growth, consumption-oriented tax-reform plan; but there will be no meat on those bones until all votes have been cast.

That is because "reforming" taxes -- unlike cutting them -- creates losers as well as winners. And that is why a pure flat tax, in spite of Sen. Brownback's comments, is a nonstarter, administration officials say. A pure flat tax would eliminate the deduction for home-mortgage interest. And while some economists may like that idea -- why, after all, should taxpayers subsidize oversize houses for the affluent? -- most voters don't like it at all. The nation's realtors already have started working the White House phone lines, to make sure the idea is buried before it is born. The deduction for charitable giving is another politically popular tax break that would be deep-sixed by a flat tax. President Bush isn't about to take on that sacred cow, either.<snip>


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[BlueEyedSon]

1. Nice, the rich win both ways.

[havocmom]

2. Yep, if a bunch of ultra rich people think it's a grand idea, be assured

it will screw most everybody else. :eyes:

[madrchsod]

3. never going to happen

to many people and groups have a vested interest in tax write offs. just bullshit to distract from the depression on the horizon...

[denverbill]

4. The change won't happen. The proposal will.

This is as Republican as it gets. Promise everything to get elected. Deliver nothing.

[whistle]

5. This would be a disaster ushering in an new era of....

...regresive taxes against those in our society who are least able to pay such taxes. It also would not eliminate income taxes as demonstrated in every country which moved to such a system in the last 50 years. Here is what happens, everything that is purchased has a national sales tax, everything!

The rational is if you don't buy something, you don't pay the tax. The same thing can be said for income, if choose not to have a job or work for pay, you don't pay income tax. But you have to live and to live in our society you must have money. Any exchange of goods or services can only be transacted with a currency, which in the U.S. is the almighty dollar. So, the moment that exchange takes place, you must pay or collect the tax and send it to the government.

Believe me our government, whether federal, state or local will continue to collect taxes for generations to come. The debts that have been incurred topping $15 trillion at all levels of government and another $17 trillion among private citizens will demand this even if we just walked away entirely from all current social entitlements (discontinued social security, medicare, disability, government retirement programs). Look at what big corporations are attempting to do with their own private retirement obligations, they are shifting them over to government to pay off. Then there are the debts, think about it, $32 trillion in debts and climbing, which now stands at $109,589.00 for every man, woman and child to endure and pay back. Remove a couple of million of the wealthiest persons from paying their fair share of government debt (by dropping inheritance taxes altogether) and the number rises even higher for the rest of us.

Anyone who would allow this economy to stagnate in this way by voting for Bush and the republicans for another four years to create even greater damage with that kind of overall debt obligation has got to be nuts.

[David Dunham]

6. Bush will lose 40 states if he proposes anything like this.

[Bernardo de La Paz]

7. Reagan Pulled the same trick; Result: Tax Code doubled in size

In 1984, Reagan pulled the same trick, being vague about the datails until after the election. The result was that the tax code doubled in size.