Editorial: 365 days until election day

Remember the sick feeling in your stomach when in the late evening hours of election night 2004 you saw that the margin in Ohio was too wide for John Kerry to make up.  Remember thinking, "Or if Kerry just wins Florida," only to discover that Bush was up by even more votes there.  I remember it quite clearly.  A few hours earlier I had returned from the hospital after having the stitches removed on my stomach, following life-saving intestinal surgery one month earlier.  That night, the pain was back -- only this time it wasn't me.  Our country was the one in trouble.

Since his razor-thin reelection, George W. Bush has used his so-called "political capital" to nominate two right-wing conservative justices; nearly get away with cutting guaranteed Social Security benefits for seniors; suspending habeas corpus; failing the Gulf Coast; enacting fiscal policies that continued to weaken the US dollar; vetoing legislation on stem cell research and health care for children; and presiding over an Iraq policy that killed about 2,000 more US soldiers.  And that is not even the half of it.

We need to prevent this mishap from happening again in our lifetime.  It starts by nominating a presidential candidate from the Democratic Party with the courage to think outside the box, and who has shown a consistent pattern of rejecting the conventional wisdom of the so-called 'experts' in Washington.  So much is at stake. 

Do we want eight more years of this mess?  Do we want the authoritarian Rudolph Giuliani, who has loaded his campaign team with neoconservative advisers?  Do we want the elitist Mitt Romney, whose country-club mentality is underscored by his deep-rooted special interest connections?  How about Fred Thompson, who strangely enough is campaigning as a Washington outsider even though he worked as a lobbyist for 20 years?  Or how about Mike Huckabee, who wants to shift more economic burden to the poor and middle class by installing a regressive national sales tax?  This is what progressives are up against.

It's exactly one year until election day.  Don't sit on the sidelines.  Get involved in any way that you can to help nominate a Democratic candidate with the backbone to stand up to the right-wing smear machine, and to restore honest and open government back to Washington for the first time since before the K-Street Project.  What we cannot afford to have is a Democratic nominee that loads up on Washington consultants and falls into the trap of promoting the status quo.  The status quo mentality is what has hurt our country this decade.  Let's start out on the right foot in the beginning of January by voting for a Democratic nominee with the moral judgment to lead responsibly and promote open democracy.

Comments

[George]

What's wrong with a 30% sales tax? I kind of like that idea assuming they dont touch my paycheck in return. It will discourage people from making stupid purchases of things such as huge cars/trucks. It would adjust the markets by rewarding quality products more so than today - if youre going to spend 30% tax it better be worth it right?

I'm open to this idea. Pay as you go. I just wish there would also be more tax levels based on the class of product you purchase. For example, less environment friendly = more tax.

[Ian]

There is no reasonable equity of distribution under the current INCOME tax system. What's more, the Tax Code has become a "tinkerer's paradise" for 53% of the lobbyists who game it in Washington DC. It's a lucrative business, and the U.S. TAXPAYER pays for ALL of it in higher prices (i.e., a hidden tax which is incomprehensible to the average working person).

Prices after FairTax passage would look similar to prices before FairTax - not "30% higher" as opponents contend - competition would see to it. So, the FairTax rate (figured as an income-tax-rate-non-comparative, sales tax) on new items would be 29.85% (on the new, reduced cost of items because business isn't taxed under FairTax - thus lowering retail prices by 20% to 30%), or 23% of the "tax inclusive" price tag - this is the way INCOME TAX is figured (parts of the total dollar).

The effective tax rate percentages, that different income groups would pay under the FairTax, are calculated by crediting the monthly "prebate" (advance rebate of projected tax on necessities) against total monthly spending of citizen families (1 member and greater, Dept. of HHS poverty-level data; a single person receiving ~$200/mo, a family of four, ~$500/mo, in addition to working earners receiving paychecks with no Federal deductions) Prof.'s Kotlikoff and Rapson (10/06) concluded,

"...the FairTax imposes much lower average taxes on working-age households than does the current system. The FairTax broadens the tax base from what is now primarily a system of labor income taxation to a system that taxes, albeit indirectly, both labor income and existing wealth. By including existing wealth in the effective tax base, much of which is owned by rich and middle-class elderly households, the FairTax is able to tax labor income at a lower effective rate and, thereby, lower the average lifetime tax rates facing working-age Americans.

"Consider, as an example, a single household age 30 earning $50,000. The household’s average tax rate under the current system is 21.1 percent. It’s 13.5 percent under the FairTax. Since the FairTax would preserve the purchasing power of Social Security benefits and also provide a tax rebate, older low-income workers who will live primarily or exclusively on Social Security would be better off. As an example, the average remaining lifetime tax rate for an age 60 married couple with $20,000 of earnings falls from its current value of 7.2 percent to -11.0 percent under the FairTax. As another example, compare the current 24.0 percent remaining lifetime average tax rate of a married age 45 couple with $100,000 in earnings to the 14.7 percent rate that arises under the FairTax."

Further, per Jokischa and Kotlikoff (circa 2006?) ...

"...once one moves to generations postdating the baby boomers there are positive welfare gains for all income groups in each cohort. Under a 23 percent FairTax policy, the poorest members of the generation born in 1990 enjoy a 13.5 percent welfare gain. Their middle-class and rich contemporaries experience 5 and 2 percent welfare gains, respectively. The welfare gains are largest for future generations. Take the cohort born in 2030. The poorest members of this cohort enjoy a huge 26 percent improvement in their well-being. For middle class members of this birth group, there's a 12 percent welfare gain. And for the richest members of the group, the gain is 5 percent."

It's well past time to scrap the tax code and pay for government the way that America's working men and women are paid - when something is sold.

(Permission is granted to reproduce in whole or part. - Ian)

[Roci Stone]

Has anybody slicing up and tossing around all this academic bull-ony stopped for one second to consider what this system would mean to someone on

a) a fixed income
b) unemployment and or disability or
c) no income at all?

No, of course not.

We call ourselves Democrats, and yet the last thing we seem to do lately is to look to those who have the least, and those who need the most.

Remember "If society cannot save the many who are poor, it cannot save the few who are rich."

This sales tax idea just plain stinks, and anyone who says otherwise does so only because they can afford to live with the consequences, and be able to shut themselves off from someone right next to them who might not be able to live at all.

Doesn't sound Democratic to me. Check please.

[George]

Roci, I'm interested in WHY you think this.

Theoretically, the sales only tax would just replace income tax. Only you get to choose where you get taxed. I dont see how that affects people on a fixed income more than anyone else?

[Roci Stone]

Let me see if I can make this Bush Simple. While you "protect" some people by making them beg to get their money back from the Government sometime after they pay it in, (Leaving them with LESS MONEY TO LIVE ON DAY-TO DAY),
What happens when the bottle of fake Tylenol you buy at Wallie World for THREE BUCKS on the shelf tag gets 30% added to it, and at the register it suddenly costs almost FOUR BUCKS?

Grow a brain. We're talking here about people who have nothing, or darned close to it, suddenly being asked (by somebody who makes 50K a year plus) to try to live on 30 percent LESS of the Nearly Nothing they almost have.
Sales Tax schemes hurt those least able to pay, because what little money they have buys LESS because they PAY MORE. It's another of those "Top down" ideas. The people with money keep more of it, while the difference is made up by the people at the bottom, where the grinding edge of poverty cuts thru the families living in their cars, and the people who call U-Haul boxes home.

People in this country TODAY are forced to make the unimaginable choice between a gallon of gas, so they can run the heater in those cars they live in, or a gallon of milk to feed (or try to) their kids who call the backseat of those cars home.

Grow a heart, Mister Grinch.

It's obvious from the glib tone of your endorsement of this nightmarish notion that you've never seen real poverty, or done anything much about it.

No one, No true Democrat, who has seen poverty, worked to help the homeless (as I have) would ever think about anything like this.

And then, we come to the working poor. You know, the men and women working three jobs to make ends meet, feed their kids, and keep their homes from being foreclosed because they have to try to live on a "minimum wage" that's as much a nightmare as this idea of yours. Suddenly, they have to come up with almost ONE THIRD MORE MONEY to pay your 30% more on what little they can buy, so no one can lay a finger on your paycheck.

Oy vey! The poorest people end up paying money they do not have, or cannot afford. Now, rather than forking over payroll taxes, the poor can go to any cash register, and wind up being screwed, blue'd, and tattooed.

Payroll taxes are not fair to the poor.In fact, they are hardly fair to anybody. But if you end them, and make everyone pay 30% at retail, and the number of people living in boxes two blocks from the "Taxless" nirvana you envision will grow until you have homeless families asking to sleep on your lawn every night. I guess that would be OK with you, wouldn't it? I mean, with no more payroll taxes, you could afford higher walls, more gates, and even a few guard dogs to chase away the new generation of riffraff. You know, the ones that ronnie ray-gun said "choose" to be homeless, along with their children and pets.

Do me a big, fat favor. Instead of standing under this street lamp, singing a siren song for an idea that ought to go noplace fast, why don't you spare some of your time and energy to work for a living wage? If you can't manage that, give up eating one day out of every week (Yes, that means go hungry) and volunteer your help at a homeless shelter or food bank, where you can see the faces of the new generation of American Poor. Ask THEM to their faces what THEY think of your sales tax idea. Trot out all your statistics, and try to impress them. The answers you'll see and hear will tell you more than I ever could about why this notion still stinks, and always will stink. But that's OK, as long as the people behind it don't have to smell it, or see it,or do much of anything else.

Check please.

Roci

[George]

Roci,
I was really just hoping to better understand your point of view. I didnt think I deserved all those insults. Despite that, I read your post. You build up several straw men, and for example, argue that I shouldnt want people to die in the street. Clearly, I dont want that. But I dont see how this tax causes that because it eliminates income tax.

Also, as i previously wrote, I think essential items like food, medicine, clothes, etc should not be applicable to this tax. There should be classes of taxes based on the item's impact on the environment and their necessity in daily life.

Relax some, it's just a blog,
George

[Chief Editor: Todd]

lol Even though I don't agree with some of what George said regarding the sales tax, I don't think Roci's strawmen attacks were really that helpful.

Personally, I happen to think the way they have it in Oregon is the right way to go. A sales tax is entirely regressive. Also, it would not provide us with enough revenue to fund the government. Under a sales tax, the poorer you are, the higher percentage of your income gets eaten up by the tax. If we are going to have that, then fine. But we have to at least acknowledge that point. So if we got rid of the income tax, we'd have both a sales tax and a payroll tax -- both of which are regressive. Personally, I tend to favor a more progressive tax. That's just me though.

[George]

But you could also have income tax on those making over 200K or something to keep more burden the most fortunate.

I think the sales tax is good for markets in theory, just not in an absolute way. We need to stop viewing everything as all or nothing. This is why we get nowhere with immigration or social security, etc. There is middle ground to be had. Otherwise we just stand still.

Bottom line is that the current tax system is not very good.

[Chief Editor: Todd]

You are definitely right about the gray area part, and the fact that our tax code needs to be simplified.

But in this internet age, unless we initiate an online tax, a sales tax would just hurt people that don't have a computer. Everyone else will just make purchases online, and go around the tax.