August 02, 2004
Declare the Pennies on Your Eyes
Matt Drudge is reporting that "REPUBLICANS PLAN PUSH FOR ELIMINATION OF IRS". Someone should tell him to stop teasing.
Seriously, he leads with that headline, and in the first paragraph says that a "centerpiece" of a "BUSH/GOP" 2nd term agenda will be replacing the income tax system with a national sales or value added (VAT) tax.
The rest of the article, though, refers to a book coming out this week by House Speaker Dennis Hastert in which, it appears, Hastert will advocate just such a change. But there's a big leap from a politician's book that's probably no better than something off a vanity press (most of them aren't) to a policy proposal or a presidential party platform plank. Oh wait. Last I checked there was no difference.
There's so much wrong with the way we collect federal income taxes now that any shot at the system or the IRS is easy, if not sometimes even cheap. To gather support though, any change would have to be revenue neutral, and a straight sales tax or VAT doesn't do that. Outside the Beltway, I think, gets it right:
Even a somewhat progressive consumption tax--perhaps excluding food and medicine and taxing certain "luxury" items at a higher rate--would still result in lower income people paying substantially more federal tax than they do now (most pay none under the current system) and would be a tax cut for the super rich who, despite the rhetoric coming out of Boston last week, pay a grossly disproportionate share of the tax burden.Certainly, though, such a proposal would shake up the campaign. Getting rid of the IRS would be a very popular idea, indeed. I don't think it could survive the demagogic reaction that would surely follow, however.
And it's so easy to demonstrate this (that the proposal would alter the distribution of tax burdens) that I'll be surprised if Bush is so stupid to pursue it, at least in the form it's being presented by Hastert in the quotes by Drudge.