If Bush’s drive to privatize Social Security was a fiasco because no one liked it, just wait until American start hearing Bush’s ideas about “tax reform.”
President Bush’s tax advisory commission agreed on Tuesday to recommend two alternative plans, both of which would limit or eliminate almost all existing tax deductions, including those for state and local income and property taxes.
The recommendations, due to be submitted to the president by Nov. 1, were designed so that the tax burdens borne by the rich, the middle class and the poor would be roughly the same as now.
But the plans, if enacted, would amount to the most fundamental change in the American tax system in 20 years. Some individuals and businesses could owe much more in taxes than they do now, and some much less, depending on their particular circumstances. And taxpayers in some parts of the country would fare better than those elsewhere.
Geography is but one of many problems for this would-be proposal. Kevin did an excellent job summarizing (with a nice table) who’s likely to benefit most from all this restructuring and “simplification.” I don’t want to spoil the surprise, but I’ll give you a hint: it’s not middle- or lower-income families.
But policy aside, the politics of this fight could make Social Security privatization look smooth and harmonious.
Let’s see, who’s been weighing in on this the past couple of days? On the left, we have folks like Sen. Chuck Schumer (D-N.Y.), among others, calling it a “dagger to the heart.”
But that’s nothing compared to what the right has been saying.
* Phil Kerpen, policy director of the Free Enterprise Fund, said, “The panel, in its primary focus, seems headed away from its mission to develop a plan for fundamental tax reform.” He accused the panel of “a series of tax hikes on the U.S. middle class to balance out relief for upper-income elites.”
* Leo Linbeck, who wants a federal retail sales tax, called Bush’s commission a “fraudulent political theater designed to protect the corrupt tax code and those who profit from its manipulation.”
* Larry Hunter, chief economist for the Free Enterprise Fund, said, “If George Bush thinks he has problems with Harriet Miers, wait until it dawns on people that his tax-reform panel is recommending a huge tax cut for rich people in blue states and a huge tax increase for middle-class folks in the red states.”
I’m beginning to wonder if a presidential approval rating of about 15% is out of the question.
One last historical comparison to consider.
The last time such sweeping changes were made in tax law was in 1986. Enactment of that measure required the unqualified commitment of President Ronald Reagan, then at the peak of his popularity; the political mastery of his Treasury secretary, James A. Baker III; the work of a bipartisan coalition in Congress that included many of the most influential senators and representatives; and two years of intensive maneuvering and horse trading.
I try to avoid predictions, but I have a strong hunch Bush’s “tax reform” scheme isn’t going anywhere.