For vot­ers, tax re­form means tax equal­ity

The Covington News - - Opinion - To find out more about Scott Ras­mussen, and read fea­tures by other Cre­ators Syn­di­cate writ­ers and car­toon­ists, visit www.cre­

There’s a rea­son Pres­i­dent Obama, Mitt Rom­ney, Paul Ryan and many oth­ers are tout­ing tax re­form these days. On the cam­paign trail, it taps into deeply held be­liefs about the way Amer­i­can so­ci­ety ought to work and the role of gov­ern­ment.

Seventy-seven per­cent think it’s im­por­tant to re­place the en­tire fed­eral tax code with some­thing sim­pler. Seventy-one per­cent fa­vor a tax code with lower tax rates and very few de­duc­tions.

The de­sire for fewer de­duc­tions stems from a cou­ple of sources. One is an un­der­ly­ing be­lief that those wealthy enough to hire the best lawyers and ac­coun­tants can find more loop­holes than or­di­nary tax­pay­ers. The other is a re­luc­tance to have gov­ern­ment pick­ing win­ners and losers with spe­cial tax breaks. Half of all vot­ers be­lieve that a tax code with no de­duc­tions and lower rates would help the econ­omy. Just 13 per­cent be­lieve it would hurt.

But the re­al­ity of de­sign­ing a re­form plan that matches up with those be­liefs is far more chal­leng­ing. The cen­tral chal­lenge can be seen in the re­sults of two re­cent polls by Ras­mussen Re­ports. The first found that 58 per­cent of vot­ers na­tion­wide think ev­ery­one should pay the same share of their in­come in taxes. So if some­one earns twice as much as an­other per­son, they should pay twice as much in taxes. Flat-tax ad­vo­cates seize on such data as proof that vot­ers sup­port their dreams, but that’s not re­ally the case.

The sec­ond piece of data shows that 66 per­cent be­lieve the mid­dle class pays a higher share of their in­come in taxes than the wealthy do. This means that part of the de­sire for ev­ery­one to pay the same share of their in­come in taxes comes from a de­sire to have up­per-in­come Amer­i­cans pay as much as the mid­dle class does.

When­ever I men­tion that per­cep­tion to tax re­form­ers, they get frus­trated and cite data show­ing that up­per-in­come Amer­i­cans pay more, not less, of their in­come in taxes. That’s where im­ple­men­ta­tion of a truly flat tax be­comes a pol­icy nightmare. A flat tax would in­crease the taxes paid by the mid­dle class and cut taxes paid by up­per-in­come Amer­i­cans. In other words, it would achieve ex­actly the op­po­site re­sult of what most Amer­i­cans are look­ing to ac­com­plish.

Still, it’s pos­si­ble to talk about fun­da­men­tal re­form and re­tain some grad­u­ated rate struc­ture. Most vot­ers (54 per­cent) fa­vor a pro­posal that would elim­i­nate all de­duc­tions and in­clude three tax rates: 5 per­cent on the first $50,000 of tax­able in­come, 10 per­cent on in­come be­tween $50,000 and $100,000, and 20 per­cent on in­come earned above the $100,000 mark. Only 25 per­cent of vot­ers are op­posed.

One of the rea­sons such a con­cep­tual plan draws sup­port is that it’s grounded in a re­al­ity that some re­form­ers oc­ca­sion­ally for­get. Amer­i­cans pay taxes on lots of things be­sides their in­come. Some taxes (sales taxes and pay­roll taxes) do take a higher share of in­come from lower and mid­dle-in­come Amer­i­cans. So a grad­u­ated in­come tax to bal­ance that out seems fair to most vot­ers, not to soak the rich but to make sure that all Amer­i­cans are treated equally.


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