George Will's questions for John Kerry

Please explain to us why the rich haven't been able to build in exceptions for themselves to existing sales taxes. Seems to me that they pay the tax on their yachts and limos same as we pay it on our John boats and KIAs.

Ed seems to think such a flat tax would mainly benefit the rich, so if you buy his argument, the rich would have a vested interest in seeing that it was flat and uniform.

I think that if there were a sufficient constituency to pass a flat tax, the political pressure to keep it flat and uniform would be overwhelming. That's certainly been the case in states where a sales tax is used instead of an income tax.

The idea appeals to people primarily because of its uniformity and fairness. In other words, it is *because* no one can weasel out of it with special tax loopholes, that people are willing to embrace the idea. Destroy that, and you'd destroy the constituency necessary to deploy and maintain a flat tax.

The rich are often politically astute. They'd realize that they couldn't monkey with the flat tax *if they want one*. Ed says they do.

Gary

They more than made it up by eliminating the inheritance tax (only the top

2% of income earners ever paid it), and by slashing the dividends tax, the top income tax rate, and the long-term capital gains taxes so that investment income is taxed at something less than half the rates you and I pay on income. 40% of all of the recent tax cuts accrue to the top 20% of wage earners, and the ratio of savings climbs as you move up the income ladder.

It's a stealth program for cutting taxes for the rich. They don't want to send up a flag over their real program by doing something so obvious as cutting sales taxes for themselves.

Indeed they do. That's why people like Malcolm Forbes pushed so hard for it. A flat tax is like money from heaven for them, especially if it's all concentrated in a consumption tax, so that their property taxes would be eliminated. You're like a messenger from God, Gary, to anyone with more than $10 million in assets.

It appeals to people because they've been sold a bill of goods by people who have a great interest in making it look like a good idea -- the very, very wealthy.

They don't have to. Any flat tax is inherently regressive, because it taxes almost all of the poor's income at the same rate that only a fraction of the income of the rich is taxed. They aren't consumers, Gary. They're owners. They buy power, not bass boats. And they'll take a sales tax on $5 million mansions in exchange for freedom from property taxes any day.

Ed Huntress

Yachts and limos may seem like a big deal to us peasants, but to the real rich folk those are just chump change. They don't care about sales tax on stuff like that, believe it or not, that's down in the noise for them. Talk to me about mansions, capital gains, and inheritence. Tax free bonds anyone?

They have what they want now. No need to change it, any change could possibly make it worse. So leave it alone is what they will say.

I'm not suggesting you *should* destroy that. I'm stating the simple fact that our political process could not possibly create a tax structure that is loophole-free. And the loopholes would go to the folks who wield money and power right now.

I'm not saying your idea is bad, just that it's hopelessly naive and ignores the present-day political realities.

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

I think Gary is really donald trump, bill gates, or malcom forbes, in disguise.

Has to be one of the above!

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Gary,

You really are fighting an uphill battle with these guys. They seem to think the fair part is when a majority sees their circumstances to be below average. Then this majority will gladly vote to make the minority of !#$%^& "rich guys" pay a higher (percentage) share. After all, it's the "fair" thing to do. These geniuses would, if they could, take ALL the assets of those with high incomes, just so they, themselves, won't have to pay. Karl Marx just didn't have enough support. Where did he and Ed go wrong?

George Willer

I learned how to research the bullshit, George, which you apparently haven't learned yet.

How many hours a week do you spend digging up the real data and analyzing it for yourself? How many Treasury Dept. rundowns of who pays taxes do you have on your hard disk?

Have you read anything by former right-wing operatives and pundits on how they pulled it all off? How much have you read by David Stockman, the creator of the "starve-the-beast" deficit-spending policy? How about David Brock, who was a shill for the neocons for 15 years or so?

In other words, have you looked into the arguments on both sides, then gone back to the original material to see who's telling the truth -- if either side is -- so you know what you're saying before you say it?

Or are you just another shill for wealthy neocons?

Ed Huntress

Ed,

No. I'm not a shill for the liberal Marxists, and I don't have envy for those who actually make the system work. I've been silently reading your bullshit, so I can just use my keen senses without reading more crap to recognize it when I see it.

When forced to choose between "neocons" or "Marxists", the intelligent will reject Marxists every time. If you study more, you'll learn that too.

George Willer

Ed may be a statist with Marxist leanings, but there's more than a bit of Willie Sutton in him too. When asked why he robbed banks, Willie Sutton replied, "Because that's where the money is."

It is a lot easier for a statist to confiscate wealth by taking it from where it is concentrated than it is to acquire it retail from the general population. Hence all the schemes to "soak the rich", that we see being touted here are really just the most convenient ways for the state to acquire wealth from the productive sector of the economy.

The usually unspoken goal of those touting "progressive" taxes is to maximize the take while causing the minimum of political heat. The usually unspoken goal of those touting a flat tax is to turn up that heat so the take will be minimized, or as Ed puts it, to "starve the beast".

Gary

LEADING BY EXAMPLE: After a briefing on the coup in Haiti, U.S. Representative Corrine Brown (Democrat from Florida) said President Bush's policy for the country was "racist" and engineered by "a bunch of white men."

That didn't sit well with the president's man she was berating, Assistant Secretary of State Roger Noriega. "As a Mexican-American, I deeply resent being called a racist and branded a white man," he told her, but promised that he would "relay that to [Secretary of State] Colin Powell and [national security adviser] Condoleezza Rice the next time I run into them."

Brown, who is black, said she was "absolutely not" apologetic for calling Noriega white, telling him "you all look alike to me." (Jacksonville, Fla., Times-Union) ...

Racism: an appalling slur on humanity, unless committed by a black Democratic politician.

"Gun Control, the theory that a 110lb grandmother should fist fight a 250lb 19yr old criminal"

This sounds plausible, except when you realize that the biggest tax breaks right now are for big corporations, like GE, Haliburton, and the other energy companies.

The breaks are being supplied to them by the present administrations because the companies bought and paid for the politicians.

The majority you speak of did *not* vote in the present administration, nor are they getting any tax breaks.

Tax code is not written by the winners, it's written by the folks with the most money.

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

Jim,

You may be right. Some of the dollars earned by corporations may be only taxed once... by the individual taxpayer. Please tell me why this is not a good thing, other than envy.

George Willer

Corporations don't pay taxes, they collect taxes by passing through the cost of the tax in the price of their products.

Gary

No, they don't pay taxes, because they don't pay taxes. The tax code is set up so they don't have to pay any by the time the accounting is done.

Basically corporations like that are citizens that control political power, but don't have to pay taxes - unlike the real citizens. They get to use the infrastructure without paying for it.

Jim

================================================== please reply to: JRR(zero) at yktvmv (dot) vnet (dot) ibm (dot) com ==================================================

"Gary Coffman" wrote

Hey, Gary, I want to understand what you mean by a "flat" tax. For example, the Steve Forbes flat tax plan was

tax = 17% of (income - $27K)

if I recall correctly. Now, let's just diddle the quantitative parameters a bit. Would you consider

tax = 57% of (income - $127K)

a "flat tax" too? If not, why not?

-- Tony P.

X% tax on (any) income would be a flat tax, as long as the same rate is applied to all income levels. It wouldn't matter if the rate is 1% or 99%, although the specific rate would be also be a matter of some importance.

Somehow I think I'm missing your point.

R, Tom Q.

A tax with exemptions isn't a flat tax. It is a two or more step "progressive" tax which treats people with different income levels differently.

What I've been talking about is not an income tax at all. It is a flat 23% national sales tax on all transactions, no exemptions, no deductions.

Since all taxes are ultimately paid by the end consumer, either directly via a point of sale tax, or indirectly in the form of higher prices for goods (due to corporations or shop owners passing through any taxes levied on them), it is simpler, more efficient, and more difficult to cheat, if the entire tax burden is a direct sales tax.

Gary

Actually, the 2.6 million chapter C corporations (those subject to corporate income tax), pay 7.4% of US federal tax revenues, and pass that cost along to their customers in the form of

1.2% higher retail prices.

It is worth noting that the number of chapter C corporations in the US is down sharply. Many converted to chapter S corporations after the 1986 tax law changes. The income of chapter S corporations is reported in the individual incomes of its shareholders, thus avoiding double taxation. (For example, I'm incorporated under chapter S.)

Corporations aren't real citizens, but they are made up of real citizens who do pay taxes. The latter make all the decisions, do all the work, and reap all the benefits of organizing together as a corporation.

Gary

Billionaire investor slams tax cuts for rich By JOE RUFF Associated Press

OMAHA, Neb. -- Billionaire investor Warren Buffett accused the Bush administration Saturday of pursuing tax cuts that favor large corporations and wealthy individuals. "If class warfare is being waged in America, my class is clearly winning," Buffett said in Berkshire Hathaway's annual report.

Except for 1983, the percentage of federal tax receipts from corporate income taxes last year was the lowest since data was first published in 1934, Buffett said. "Tax breaks for corporations (and their investors, particularly large ones) were a major part of the administration's 2002 and 2003 initiatives," Buffett said.

Buffett said many large corporations now pay nothing close to the stated federal tax rate of 35 percent.

In an April 2 speech, Pamela Olson, assistant secretary for tax policy at the U.S. Treasury, referred to "a certain Midwestern oracle" when she said Buffett played the tax code "like a fiddle."

However, Buffett said in the report that his investment company pays its taxes and is almost certainly among the country's top 10 taxpayers. The company will pay $3.3 billion in 2003 corporate income tax, he said.

Berkshire owns businesses and stock in a wide variety of industries, including insurance, furniture, restaurants and newspapers.

ON THE INTERNET Berkshire Hathaway

You'd be wise to augment your "keen senses" with some facts, George. You may be a very clever and keen analyst, but all you're analyzing is the inside of your own head.

Put some facts in it and see what comes out. You may be surprised. For example, you could start by looking at Bush's tax program for FY 2005. It's really interesting. If you're in an otherwise high bracket but if the large majority of your income comes from investments, your tax rate will be about

2/3 that of the average middle-class taxpayer.

Then you might want to look around and see how the charade was pulled over your eyes.

The intelligent and well-informed realize there are more than two choices. The two-value dogmatist almost always is someone who knows very few facts, but who is prepared to pontificate on almost any subject, anyway.

Ed Huntress