In Washington, being right doesn’t guarantee success. Sometimes, assembling the right team, or laying out the right process, or having more stamina than anyone else can make the difference. Sometimes you need all three.
In 1986, two very different personalities on opposite sides of the Capitol had the same idea. Representative Dan Rostenkowski, a Democrat, and Senator Bob Packwood, a Republican, each decided that they would personally lead the effort to reform America’s tax code. Never short on ego, the two tax committee chairmen threw themselves into the task. After months of tortuous negotiations, they emerged with a bill that lowered rates across the board while repealing hundreds of tax breaks. Tip O’Neill blessed it, Ronald Reagan signed it, and, for the first time in decades, the tax code was simpler.
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It is only natural to contemplate an overhaul during times of political changing-of-the-guard but once again John fails to focus on the reason this proposal is being suggested in the first place. A flat tax means a lowering of rates for higher earning individuals and a slight raising of taxes on the poor because the should pay "something" right? This all makes so much sense because we make those lazy poor people pay and we get to take business away from all those greedy tax attorneys. The main (hidden) focus is a shell game however. Give to the rich smart people, the "job-creators" and just wait for the trickle. No thanks. It was a cynical, underhanded, bad idea when proposed by another very wealthy guy (Steve Forbes) back in 1996, it was a bad idea again in 2000 and what do you know, here we have right-wing political surrogate extraordinaire John Sununu braying about it on the eve of possibly the single most significant transfer of money from the middle class to the rich in decades (a Romney Presidency).
Mr.Sununu, subsequent to your recent comments about Colin Powell, it's a wonder why the Globe continues to give you a forum at all.
Actually, that was his father. But the apple does'tfall from the tree.
Tax code exists because of efforts to direct social policy in ways that would benefit the people. Republican solution is to trash it all, going backwards instead of forward. How about making more enforcement and scrutiny of offshore accounts where many hide their money from the tax man? Its not your mechanic, nurse or carpenter whose involved here. Make no mistake, when they talk about closing loopholes, it going to be YOUR deductions.
Can we start with everyone paying the same rate?
Interesting that the author seems to think that tax code modification could only happen if the Republicans win back the Presidency. Is that because they'll only play ball if they get to make the rules, be the captain, manager, umpire, ticket taker, popcorn seller, and beer franchise? The stench of greed, power, and self-interest wreaks with every Sununu column.
The central thesis behind the idea of taxation is that the government needs tax revenue to perform certain functions for the good of the people. The ideal tax code, then, would be the code which can maximize revenue to the treasury. Nothing else matters. So when the peanut gallery whines that lower rates are "unfair" or that it helps "rich people", ignore it all. If lower rates on wealthy people lead to greater tax collections, then lower rates are clearly the better approach.
NEW PARAGRAPH: The tax code has long been used as a way to control behavior. By giving tax breaks on behaviors the government likes, it created more of that behavior. The home mortgate deduction, for example. But in the last 25 years, the tax code has grown so complex and so burdensome, that it is a hindrance to economic growth.
NEW PARAGRAPH: The Tax refrom Act of 1986 should be the model for reform, for who ever our next president is. It lowered the top rate from 50% to 28%, while eliminating many loopholes that had benefitted many. The result was nothing short of miraculous. Lower rates led to a surge in economic growth; and a sharp increase in tax revenue. The reason for it is simple: It created MORE yax payers.
The proof of this is in one metric that says it all. The number of small businesses that file as Sub Chapter S corporations grew sharply in 1987 and 1988. These are mostly for individuals who file their own tax returns for their business. A lower rate made this possible.
Yak payers is right. Stockman, Reagan's man, has admitted trickle down doesn't work. Also, simplifying the tax code is GOP-speak for simplifying MY tax deductions, by doing away with them while giving the wealthy a bigger payday to shelter in the Cayman Islands, stiffing the society that made them rich,
Paragraph one is a clear statement of the cold and cruel version of what government revenue should be. Glad I'm not in your family, if that's the way you operate. Paragraph two fails to note that "behaviors that the government likes" are defined by a cutthroat process where the strong get more, and the weak get trampled. Paragraph three implies that the economic growth of the late 80's and 90's was a result of Republican tax changes. What about a few other factors playing into that growth, like the internet?
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Sununu is as usual clueless. I was around fo that tax reform and that particular tax reform went hardly anywhere in reforming the code. The Dems. and Repubs agreed to it because it did not in fact hurt either of their favorite little loopholes.
Perhaps a re-elected Obama and a Republican House and Dem Senate could compromise themselves into a postion of tax reform. The fact is Romney's idea of tax reform is the upper-middle class and the middle class take it in the ear and the wealthy make out.
I have bet and invested heavily on the bet Obama gets re-elected if Romney wins then I have to pull out of my investments, or hope the futures are correct in anticipating a better economy for the next year and then bail before Romney kills it all with massive spending reductions.
So am I prejudiced. You bet. I want an Obama win purely for my portfolio. I can't take another Bush reversal. Too old for that.