Wesley Clark, after teasing the release of a “big idea” last week, unveiled the proposal this morning — a major overhaul of the U.S. tax code. At first glance, this looks like a political winner for Clark.
Under the Clark plan, the top .1% of taxpayers will have their tax bracket increased by 5%, but the federal tax burden on everyone else — 99.9% of U.S. taxpayers — will either stay the same or decrease significantly.
The campaign appears to be hitting all the key aspects of tax reform. From Clark’s policy paper:
* Clark’s Plan is Fair: Under President Bush, typical families have seen their incomes fall by nearly $1,500 – while President Bush provided an average tax cut of $128,000 to taxpayers making over $1 million. Under Wes Clark’s Families First Tax Reform:
– A married couple with two children making $50,000 would get a $1,583 tax break.
– A married couple with three children both earning the minimum wage, or $21,000 annually, would get a tax break of $2,287.
– A married couple with two children making $85,000 would get a $975 tax cut.
– 31 million working families would get tax relief, with the typical family getting a $1,477 tax cut.
* Clark’s Plan is Progressive: Wes Clark’s proposal not only provides relief for middle-income parents struggling not to fall behind in the Bush economy, but to the working poor struggling to work their families out of poverty and into economic independence.
– Hundreds of thousands of children will be lifted out of poverty.
* Clark’s Plan is Simple: Under Wes Clark’s plan, families will only need to fill out a simple, three-line form to find out if they need to pay federal income taxes, providing their income, number of children, and marital status. And the majority of families will no longer be required to file tax forms.
* Clark’s Plan is Responsible: The plan will provide $33 billion annually in tax relief for working families. This will be paid for without increasing the deficit by:
– A 5 percentage point increase in the tax rate only on income over $1 million per year. This surcharge, which could be used only for working family tax relief, would not apply to the first $1 million of income or to any capital gains – so it will not affect 99.9 percent of taxpayers.
– Closing corporate loopholes, including the ones that Enron took advantage of to unfairly cut its taxes.
We’ll see over the next 24 hours or so how the plan is perceived politically, but this sounds like a winner to me. Perhaps most importantly, Clark pitched his tax reform proposal as a moral imperative, as well as an economic one.
“Over the last two decades, the tax system has become more regressive, as the share of taxes paid by the richest Americans has decreased significantly,” Clark said this morning in New Hampshire. “Twenty-five years ago, the wealthiest Americans paid a 70% tax rate. Today, they pay half of that — 35%. And the share of total taxes paid by U.S. corporations has dropped by nearly fifty percent. And where has the burden of this dramatic reversal fallen? On working families and the hardest-pressed Americans.”
Clark added, “For years now, Republicans have campaigned under the banners of tax reform and family values. But for them, tax reform is all too often a cover for giving huge tax breaks to the families of the wealthiest Americans. They don’t care if it’s fair to working families, if it makes the tax code more complicated, or if it explodes the deficit. That’s simply unacceptable. It’s time for Democrats to take back tax reform as our issue.”
Sounds right to me.