Taxing My Patience

This is seriously pissing me off. Forget the conservative social agenda for a moment, and let’s focus on Bush’s economic proposals, which are perhaps even a greater worry. Every story that addresses his plans is further evidence that his primary economic goal is the death of The New Deal.

During his reelection campaign, President Bush piqued interest among conservatives and liberals alike when he said replacing the income tax with a national sales tax was "an interesting idea."
No, it’s not an interesting idea. In fact, it’s a terrible idea. The poorest among us pay no or very little income tax under the current system. If a family can afford only staples—the bare necessities, such as shelter, food, utilities, clothing—adding a national sales tax to those items is not going to help them; it’s going to make life more expensive and thereby more difficult. In Britain, where there is a national sales tax (VAT), items such as food and children’s clothing are exempt, which I imagine would be the case in the US as well, should life be breathed into this folly. But Brits also still pay income tax, too.

A national sales tax is not the answer to the increasing budgetary crisis in this country. Unmitigated spending in Congress, egregious tax cuts for the wealthiest among us, fiscal irresponsibility across the entire administration, ever-increasing costs for the war in Iraq, and legislation that seeks to enable more and greater spending rather than enforcing spending limits are the problems that need to get addressed, and a national sales tax solves absolutely none of them, which is perhaps the most pertinent argument against the idea. It’s a solution to a distorted holograph of the actual problem. Additionally, a national sales tax would surely cause a spike in inflation, as companies build the increased cost of their raw materials into the price points of their merchandise. The American people must treat this ridiculous suggestion with the contempt it deserves.

[A]dministration officials have begun dialing back expectations that they will move to scrap the current graduated income tax for another system.

Instead the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps intended to simplify the system and encourage economic growth, according to several people who are advising the White House or are familiar with the deliberations.

The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said. (Emphasis added.)
So, to pay for even more tax cuts for the rich and corporations, Bush is proposing taking away the tax benefits employers receive for providing health coverage to their employees, effectively removing the only incentive that employers have to extend said benefit to those in their employ.

At least 40 million Americans are currently without health insurance right now. What do you think your chances are of joining their ranks if your employer has no inducement to provide you with coverage? Do you think he’ll keep paying part of your premiums out of the goodness of his heart? Do you think he’ll even continue to bear the administrative costs of a health plan?

"The White House is dreaming if they think they can do all this," said Bruce Bartlett, a conservative economist with the National Center for Policy Analysis.
Well, Bruce, I hope you’re right. And more importantly, I hope the American people awaken from our own extended, snoozy dreamland. We’re long overdue for a wake-up call, and it’s up to us to prevent this White House’s dreams from becoming our national nightmare.

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