2012 Tuesday: Out of many, one tax reform plan will emerge — and set the stage vs. Obama
To those who worry that the rough-and-tumble Republican primary will produce a nominee who’s damaged goods by the time he* faces President Obama, allow me to point to the plethora of tax-reform plans coming from the candidates.
Concurrent with the daily superficial dramas that come with a presidential campaign is a real, substantive, intellectual debate about how to repair a fundamental — and fundamentally broken — function of government: the way it funds all its other functions. And it all but ensures that the eventual nominee will come equipped with a thoroughly vetted, central policy proposal that will compare very well with Obama’s embrace of the current tax code with just a few “tax the rich” tweaks.
Consider the range of proposals:
- Newt Gingrich was first on the board, back in May, with a plan that ends the capital gains and death taxes, lowers the corporate rate to 12.5 percent (the same as Ireland) while allowing full expensing of new equipment, and “moves toward an optional flat tax of 15 percent” for individuals.
- Jon Huntsman took up the banner of the Bowles-Simpson commission’s recommendation: eliminating deductions and credits, along with the Alternative Minimum Tax and the double taxation of capital gains and dividends, in exchange for three rates: 8 percent, 14 percent and 23 percent. It’s not a flat tax, but it’s a reform that flattens rates, offers broad-based pro-growth incentives rather than a maze of rent-seeking opportunities, and simplifies tax calculations. It also reforms corporate taxes and lowers the rate to 25 percent.
- Herman Cain made the biggest splash — and sparked much of the present debate — with his 9-9-9 plan: a 9 percent tax on individuals and corporations, plus a 9 percent sales tax. All other taxes would be eliminated. Cain has been revising the plan during the past several days to damp criticisms of it, and we might not have seen the final version yet.
- Rick Perry today revealed his tax plan: an optional (like Gingrich’s) flat tax of 20 percent that increases the standard deduction and maintains exemptions for mortgage interest, charitable donations and state and local taxes for those earning less than $500,000 a year. Perry would also eliminate the death tax and lower the corporate tax rate to 20 percent — with a super-low, temporary 5.25 percent rate for repatriated income from overseas.
- Of all the contenders, Mitt Romney has sketched out the fuzziest tax plan. He would keep individual rates at the Bush-era rates for now, with a promise to lower them to unspecified levels in the “long run,” and eliminate the taxes on capital gains and dividends — but only for those who earn less than $200,000 a year. He would lower the corporate rate to 25 percent. Like most of the other candidates, he would switch to a “territorial” tax system for companies.
- Well, Romney’s plan may be the fuzziest except for Ron Paul’s, which calls for getting income taxes down to zero percent eventually but doesn’t explain how to get there.
While there are some broad areas of agreement among these plans — flatter, simpler and broader are carrying the day in this primary — there’s a great deal of debate among them as to how to achieve those broad aims. Should such a basic reform as tax reform provide options for people to continue as they are now or change, as Gingrich and Perry argue? Should consumption be taxed by the federal government — either directly, as with Cain’s plan, or indirectly, as with the plans that keep the income tax but eliminate taxes on investments and savings? How much progressivity in the code is enough — or too much? Should Republicans play along with Obama’s game by treating higher earners differently when it comes to exemptions (Perry) or investment income (Romney)?
GOP primary voters have a chance to hash out these questions for themselves as they evaluate the candidates. And the analyses of these plans by independent and even left-leaning think tanks, as long as they’re intellectually honest, give the candidates a chance to weather criticism and make changes (a la Cain’s recent tinkering) before one of them wins the nomination and faces Obama.
And it must be said that any of these plans will contrast quite brightly with Obama’s plan to keep most of the current tax code, with higher rates — and fewer/no exemptions! — for higher earners. It is the difference between keeping a broken system mostly intact and starting mostly, or in some cases totally, over. It is the difference between using the tax code to reward/punish one’s allies/enemies, and simplifying it so that it doesn’t stand in the way of growth and investment that don’t develop the way government planners think, or hope, they will.
* – Yes, I am discounting the possibility that Michele Bachmann wins the nomination. And, while we’re talking candidates with zero chance of winning, Rick Santorum. And Gary Johnson. And any other candidates who have never gotten a mention on this blog.
– By Kyle Wingfield
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168 comments Add your comment
UGA 1999
October 25th, 2011
3:22 pm
DW…..hahaha you have yet to post one legitimate point. All you do is personal attacks. If you were educated you would realize that once someone goes to personal attacks the debate is over and the other person wins! THANKS
UGA 1999
October 25th, 2011
3:23 pm
Southern….and who is responsible for NAFTA???
emo
October 25th, 2011
3:23 pm
Based on the veiled profanity, name calling and low level of insults here, this is why I can’t discuss this stuff with my right wing friends; they just don’t get reason.
I had a boss who used to say, “You don’t wrestle with pigs; you just get dirty and the pig enjoys it”.
That’s why it’s a waste of time trying to reason with you all, you just don’t and never will get it.
Go ahead, call me names, I’m out of here.
Billy Bane
October 25th, 2011
3:23 pm
DW is desperate.
Billy Bane
October 25th, 2011
3:24 pm
“Based on the veiled profanity, name calling and low level of insults here”
You must be referring to DW.
UGA 1999
October 25th, 2011
3:24 pm
emo….go back and read the posts and then honestly tell us who is not reasoning with common sense. You are just so biased that your ignorance refuses to allow you to see the truth.
Billy Bane
October 25th, 2011
3:24 pm
“Go ahead, call me names, I’m out of here.”
No one has called you a name.
UGA 1999
October 25th, 2011
3:29 pm
Billy…I know right! haha
It is like a 4 year old kid getting mad at losing a game of kickball and then saying “I am going to take my ball and go home”!! hahaha hilarious.
Where does the left find these people?
DW
October 25th, 2011
3:30 pm
“DW needs a diaper change.”
Really Billy? Really?
UGA 1999
October 25th, 2011
3:31 pm
DW….dude you act like you are 2 years old. BTW….I dont see a name being called anywhere in that post.
Southern Comfort
October 25th, 2011
3:32 pm
and who is responsible for NAFTA???
According to records, there are 61 Senators and/or former Senators, 234 Reps and/or former Reps, and President Clinton all to blame. I’d also add any and all business interests who lobbied in favor of that agreement.
House vote
http://clerk.house.gov/evs/1993/roll575.xml
Senate vote
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=103&session=1&vote=00395
UGA 1999
October 25th, 2011
3:33 pm
Southern….that is all CLINTONS baby.
Common Sense isn't very Common
October 25th, 2011
3:34 pm
If I remember correctly it was Bush 1 that started putting NAFTA together even though Bill Clinton signed it.
Southern Comfort
October 25th, 2011
3:35 pm
and who is responsible for NAFTA???
According to records, there are 61 Senators and/or former Senators, 234 Reps and/or former Reps, and President Clinton all to blame. I’d also add any and all business interests who lobbied in favor of that agreement.
House vote results
Senate vote results
From what I see, it looks like one of those bipartisaned deals. There’s plenty of blame to go around.
UGA 1999
October 25th, 2011
3:35 pm
Common….nope dude wrong again. NAFTA was started and signed by Clinton.
Southern Comfort
October 25th, 2011
3:36 pm
UGA
Clinton signed it, but he did not pass it through both houses of Congress. Congress plays a big part in trade agreements since they can not be enacted by Executive Order.
Common Sense isn't very Common
October 25th, 2011
3:38 pm
Following diplomatic negotiations dating back to 1986 among the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The agreement then needed to be ratified by each nation’s legislative or parliamentary branch.
Before the negotiations were finalized, Bill Clinton came into office in the U.S. and Kim Campbell in Canada, and before the agreement became law, Jean Chrétien had taken office in Canada.
from wikipedia
Sorry dude wrong again
UGA 1999
October 25th, 2011
3:39 pm
Common…..Dude you are a liar. You changed what that said. CLINTON signed NAFTA. Typical Democrat lying to try to prove a point. it is ok we are used to it from you.
Southern Comfort
October 25th, 2011
3:41 pm
http://timelinesdb.com/listevents.php?subjid=963&title=NAFTA
NAFTA timeline…
If you notice, there were 14 months of negotiations before NAFTA was announced on August 12, 1992. William Jefferson Clinton took the oath of office on January 20, 1993. That would mean that Clinton worked on NAFTA as the Governor of Arkansas if it were solely his blame. Bush I signed off on the agreement before he left office.
As I said earlier, it was one of those bipartisaned deals. Plenty of blame to go around.
a dad
October 25th, 2011
3:41 pm
OK, y’all help me out here. I thought one of the fundamental “goals” of Obama, Occupy people, etc., was to get everyone to pay their “fair” share. So, what is so wrong about having “everyone” pay the same percentage of their income, with a cut off point so individuals and families making less than “X” per year get a full refund at the end of the year. How is making someone pay more than anyone else “fair?”
Our tax code sux! All the loopholes, etc. I personally like a flat tax which is deducted from one’s paycheck (assuming, of course, the individual has a job) coupled with a natonal sales tax. A national sales tax give every individual direct control over the amount of taxes they pay. Don’t want to pay sales tax, don’t buy a lot of stuff. If you’re one of those “evil rich,” you’ll pay more buying your BMW 750 than poor old joe will buying a Honda Civic. You want the wealthy paying more in taxes, there’s your example. You earn more, you buy more. Simple economics. I like aspects of Perry’s plan in keeping the mortage deduction (the middle classes biggest deduction), and yes, dividends and such are multi-taxed (and anyone can buy stocks, penny stocks, etc. Stop whining, read some, and invest for your future). Corporations flat tax, with deductions for equipment and such since new equipment means greater production which just might lead to new jobs.
OK, can’t wait to read all the informed retorts.
UGA 1999
October 25th, 2011
3:42 pm
It was signed in 1993 (Clinton) and took affect in 1994 (Clinton).
UGA 1999
October 25th, 2011
3:43 pm
a dad….haha they only want “fair” if it benefits the lower class. Nothing fair about it.
Billy Bane
October 25th, 2011
3:45 pm
“Really Billy? Really?”
Yes.
Southern Comfort
October 25th, 2011
3:45 pm
http://www.yesmagazine.org/new-economy/images/nafta-signing-ceremony-federal-photo/view
Photo of NAFTA signing ceremony….
UGA 1999
October 25th, 2011
3:46 pm
Southern….again ANOTHER LIE!!
http://www.google.com/imgres?imgurl=http://www.globaljusticecenter.org/images/presidentclinton.jpg&imgrefurl=http://www.globaljusticecenter.org/articles/sofar_fromgod.html&h=239&w=388&sz=19&tbnid=Rv_d2G93L1faBM:&tbnh=73&tbnw=118&prev=/search%3Fq%3Dnafta%2Bsigning%2Bpicture%26tbm%3Disch%26tbo%3Du&zoom=1&q=nafta+signing+picture&docid=GfRUa82MRObF9M&hl=en&sa=X&ei=ChKnToHNI8qbtwfezJn4Dw&ved=0CCgQ9QEwAw&dur=3516
Common Sense isn't very Common
October 25th, 2011
3:47 pm
UGA 1999 – Maybe you weren’t old enough to remember it, and someone had to read it too you. Maybe that’s why I can read and comprehend. You not so much.
UGA 1999
October 25th, 2011
3:47 pm
FOOL!
http://en.wikipedia.org/wiki/File:Bill_Clinton_signing_Nafta.gif
UGA 1999
October 25th, 2011
3:49 pm
Common…..ha I remember it well. You really need a history class. Did you have a hard time with grammar school? Look on Google or just look at the dates of NAFTA and then look who the president was.
How in the world do you guys get through life being so ignorant. You wonder why there is a lower class in this country? Look in the mirror.
Southern Comfort
October 25th, 2011
3:49 pm
UGA
You do know the difference between signing a trade agreement versus your country’s government ratifying it, right? Bush I signed the initial agreement. Clinton signed the ratification of the treaty, which made it law of the land. Just because it doesn’t fit your “idea” of the truth does not automatically make it a lie. Read and research things a bit before you make your final choice. Part of my job is in the area of customs, so I’ve had to do my fair share of reading on trade agreements and such.
UGA 1999
October 25th, 2011
3:50 pm
Southern….once again you are wrong. No matter how many times you say a Lie it is still going to bve a lie.
UGA 1999
October 25th, 2011
3:51 pm
Southern….OMG you work in customs??
Southern Comfort
October 25th, 2011
3:54 pm
UGA
We are both right, but you fail to see that.
When a trade agreement is reached, there is a signing of that agreement. After that agreement is signed, it is up to the law making bodies of each country to ratify that treaty before it can become law. All of those things typically happen under one administration. However, because of elections, NAFTA was signed by one administration in the three countries, and the ratifications were signed by different leaders in Canada and the US. I can’t remember if Mexico had elections at that time.
As I said earlier, go back and research things a bit. Don’t just take the first thing you see as the truth, or you’ll never find out the real truth about things.
And, yes, I work in customs. Problem with that???
BULLSEYE
October 25th, 2011
3:54 pm
uga IS ONE DUMB SUMBITCH
Southern Comfort
October 25th, 2011
3:58 pm
UGA
An even more recent one to look at is the US/Colombia Free Trade Act. The original agreement was signed on November 22, 2006, but is just now being signed into law. Bush II signed the initial agreement, and Obama is just now signing the ratification into law.
UGA 1999
October 25th, 2011
3:58 pm
Bullseye…thanks for helping prove my point about the left.
BULLSEYE
October 25th, 2011
4:01 pm
And you proved mine.
Common Sense isn't very Common
October 25th, 2011
4:06 pm
I don’t wonder why many people follow the smoke blowers.
Since they don’t believe any news media except faux news.
Since before Reagan NO president has but main stream America ahead of getting elected(re-elected) or pandering to the donaters to those elections.
Southern Comfort
October 25th, 2011
4:10 pm
NoCom
In my opinion, they all blow smoke.
Common Sense isn't very Common
October 25th, 2011
4:12 pm
But where do they blow it. In their eyes so they can’t read? or in their preferred places
Lil' Barry Bailout (Revised Downward)
October 25th, 2011
4:13 pm
Can’t wait to see the plan Obozo will offer in response. You can be sure it won’t include anything that would require his base (parasite losers) to pay their fair share towards their country’s governance.
Common Sense isn't very Common
October 25th, 2011
4:13 pm
SoCo by they way how are the Hindi language classes coming LOL
carlosgvv
October 25th, 2011
4:14 pm
UGA 1999 and Billy Bane
Wrong yesterday, wrong today, wrong tommorow. At least you’re consistent.
Southern Comfort
October 25th, 2011
4:14 pm
I think it’s a mixed bag depending on the person who’s getting smoked out. There’s quite a few people who either can’t see or choose not to see the true nature of things going on and tend to believe the mumbo jumbo peddlers when they speak.
Southern Comfort
October 25th, 2011
4:16 pm
NoCom
The Hindi is slacking, but my Korean is getting much better, thanks to Kia and Hyundai. Since the Infosys lawsuit, I have seen fewer and fewer L1’s and H1B’s coming through. I’m guessing they’re all sitting on pins and needles to see what happens.
Common Sense isn't very Common
October 25th, 2011
4:28 pm
SoCo – well I don’t know their point of entry, but here in Cleveland Hindi is fast becoming the second language (TaTa has a large group here) thanks to the Ohio state government
Know your history
October 25th, 2011
4:32 pm
#occupy my desk…
October 25th, 2011
2:02 pm
You know what would cause a rapid turn around of our economy? Obama not being reelected. I know everyone will start screaming and banging their foreheads ala Rain Man but lemme splain. Consumer and investor confidence has never been lower yet businesses have more cash on hand than ever. Individuals are not spending and business is not investing/expanding right now. We can argue the specific causes but the bottom line is that there is serious mistrust of this administration from the business sector, which is where everything else gets set in motion. I honestly don’t think that most business owners think the POTUS has their best interest in mind and it is hard for me to disagree with that. What is it going to cost me to hire people this time next year? What are my taxes and regulations going to look like? It is hard to gamble right now when you don’t have any confidence in the system.
Not quite accurate. For the last two years, business leaders have known that the government would be unable to affect major changes in social and fiscal policy due to the election of the Republican majority in the house. There have been several years of unchanging policy, due to the sharing of power between the parties. Your argument that the administration is responsible is unfounded. What you are correct in pointing out is that individuals are not spending. There is no demand, therefore businesses are reluctant to spend and hire.
Billy Bane
October 25th, 2011
4:33 pm
“Wrong yesterday, wrong today, wrong tommorow. At least you’re consistent.”
How so, cupcake?
DW
October 25th, 2011
4:36 pm
@CARLOS
+1 .. quite the pair of ignorant losers
Southern Comfort
October 25th, 2011
4:37 pm
NoCom
I think JFK is the major point of entry. There’s direct service to Mumbai there via Delta. When Delta ran the ATL-Mumbai route, it was a daily thing to see dozens upon dozens of them a day. Tata has a major office in Cincinnati too. I’ve run across a few of them headed there from time to time.
carlosgvv
October 25th, 2011
4:43 pm
Billy Bane – 4:33
By being here in the first place. You are obviously a kid who does not belong on an adult site. Does your mother know you’re here? Did you lie to her and tell her you were doing research? You need to leave here, do your homework, and then eat supper. There’s a good boy.