js7a's Journal: Another Bush "Rich Don't Pay Taxes" -- and the Reason Why

Bringing the total to seven over the past month, and with by far the best set of compound syntax errors in the series:

"Just be careful -- all I ask you is be careful about all this talk about taxing the rich. You know how that goes. The so-called rich hire accountants and lawyers to maybe not pay as much, and therefore, in order to meets all these promises guess who gets to end up stuck with the bill?"

-- George W. Bush, August 12

So, Mr. Bush, how are the rich geting away with this?

In 2003, an underfunded IRS pursued only 18 percent of the abusive tax shelter cases uncovered by IRS agents. As recently as March 30, the IRS Oversight Board released a special report imploring Congress to go beyond the president's 2005 budget request of a 4.6 percent increase in funding for IRS and detailing what it identified as a consistent underfunding of tax enforcement activities during the Bush administration. Despite the 4.6 percent increase, the report found that IRS's enforcement capability would still continue to decrease for the fourth year in a row because the increase inexplicably ignored $230 million in expected cost increases related to pay raises and other required expenses. The report also found that the Bush budget for the IRS would lead to about a half-million unresolved delinquent tax cases and create a national tax gap of $311 billion or 65 percent of the projected 2004 budget deficit.

Yet the Bush administration was able to find room in its 2004 budget to dramatically increase funding for compliance with the Earned Income Tax Credit (EITC) for low-income families. The Bush budget requested a 68.5 percent increase in EITC enforcement, despite the fact that EITC avoidance represents only 2.8 percent of the overall uncollected tax gap....

-- Cassandra Q. Butts, Center for American Progress

That explains it!

Two weights ...

[tomhudson]

It's the old story of 2 weights, 2 measures (or 2 laws, one for #1 (the rich), and one for the rest of us).

A flat tax, no (or few) exemptions, would avoid all that.

flat tax is regressive

[freejung]

As it is, the rich are paying a larger percentage of their income in taxes, as an aggregate, despite all the corruption and the recent regressive tax cuts. The problem is that the tax is not progressive enough, not that it is not progressive at all. Indeed, a flat tax would be a huge step in the wrong direction, placing much more of the burden on the middle class and the poor. What we should have is a more progressive tax, strictly enforced especially on the high end.

Re:flat tax is regressive

[daveo0331]

Good point. The progressive nature of the tax code isn't what makes doing your taxes complicated, and it isn't what gives the rich a way to avoid paying their share. The problem is all the loopholes and deductions. If we got rid of all the various ways to deduct income from taxes, but continued to have a progressive structure with multiple tax brackets, doing your taxes would be as simple as adding up how much money you made during the year and then using a table to look up what your tax is for that amou

Re:flat tax is regressive

[freejung]

If you send every family a check for $1,000 for every child, you're increasing government spending, and that's considered "liberal." But, if you let every family take a $1,000 credit per child when they do their taxes, you're cutting taxes, and that's considered "conservative."

The thing to keep in mind here is that they are not equivalent, because to claim a $1000 tax cut, you have to be paying $1000 in taxes. In other words, while equivalent for the middle class, the Republican way does nothing for the

Re:flat tax is regressive

[tomhudson]

All the flat tax proposals I've seen have a base amount that isn't taxed, and close off the loop-holes that allow the higher-income earners to avoid paying fewer taxes than the majority.

Re:flat tax is regressive

[js7a]

Please read this [ctj.org] from Citizens for Tax Justice.

Thank you

[freejung]

That's what I'm talking about.

Re:flat tax is regressive

[tomhudson]

The complete tax exemption for personal investments replaces many small loopholes with one enormous loophole. Rather than alleviating the plan's regressivity, this aggravates it: A large share of the income of the wealthiest Americans wouldn't be taxed at all. That would leave middle- and low-income families holding the bag.

Closing that one loophole makes the flat tax an equitable revenue producer for everyone. The problem is getting that loophole closed. Under BOTH systems, the rich pay less. Under a fl

Re:flat tax is regressive

[js7a]

Under a flat tax with a basic exemption, the rich would pay more than today.

IIRC, most people with incomes in the $150K-$1M range don't have, in general, nearly as much sheltering as corporations and $1M+ people.

What figures are you talking about? How much of an exemption, and what percentage tax?

Re:flat tax is regressive

[tomhudson]

Good question. Certainly anyone making a $M ... I donno - I('d have to have access to all the stats, then see what garbage should be cut from the budget (after all, we all know that spending increases to exceed revenue in the US of A).

Fuzzy Math

[freejung]

Hey, have you ever heard Fuzzy Math [thebots.net]? Relevant quote: "After my plan is in place, the wealthiest Americans won't pay any tax at all!"

See also Bushwack [thebots.net] and Bushwack 2 [thebots.net]. ("The best way to win an election is deliberate deception.")