Tax Reform
A few months ago, Rep. John Dougall developed an income tax reform idea as we talked in my office. We agreed that it would make sense either to have a flat tax or to simply drop the top rate on our existing system. “What about creating a bifurcated system and doing both?” he asked. “Drop the rate a bit on our current system, set up a separate flat tax system, and let each taxpayer pick which one he wants to use.”
I told him he was crazy and that it wouldn’t have a prayer of moving forward.
The Governor and Senate leadership now endorse the idea. Further proof of my political genius.
I told him he was crazy and that it wouldn’t have a prayer of moving forward.
The Governor and Senate leadership now endorse the idea. Further proof of my political genius.
posted by steve u. at 7/19/2006
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7 Comments:
Brilliant!
So, let me understand. You endorse an idea and the Governor shuns it? You shun an idea and the Governor endorses it? How long have you known about your powers?
Aside to myself: The force is strong with this one.
Another question. Don't you just love to say 'bifurcated'?
Aren't you worried this is another step toward making the tax system more complicated? I thought the idea was to simplify the tax system. This could create a lot of headaches.
Tyler,
It's nothing big. Just some basic Jedi mind tricks. "You will oppose the House's plan." And, yes, I do love saying the word "bifurcated." Another fun word is "vanilla," which is interesting since I'm not a huge vanilla fan.
Daniel,
No doubt, there are complexities to be worked out. One that comes to mind for me involves flipping between the systems in different years. For example, could depreciation, interest, and charitable contributions be pushed into one year. That year, of course, the taxpayer would itemize under the old system. Other years, he might opt for the flat rate.
I'm not so sure that a big part of the project is to simplify the system. How do we get much more simple than our current state system? Once you've done your federal return, the state return is a breeze.
Unfortunately, we named the study group The Tax REFORM Task Force, which must have sent the message that we were required to change something. My meager goal is to take less money out of the economy. And I think many House members, including Rep. Dougall, share that goal. Others who must participate in this project, though, seem to need something shiny and new. Tax relief isn't enough; a flat tax or a simple reduction in rates is boring; it's got to be . . . novel! If that's what it takes to provide some tax relief to some of the highest taxed citizens in the Nation, I'm willing to look at it.
Ah, politics!
I have two questions.
1. How will an income tax cut affect public education funding? Do you agree that our schools need more money, especially with the looming teacher shortage? I got a C in Econ110, but I think we may have to pay more to attract more teachers.
2. Everyone says that a tax cut will fuel economic development, but if our tax revenue is more than $300 million above the projected totals, isn't our economy doing pretty great already?
I would like the legislature to consider plans that are revenue neutral, like the original task force was asked. Senator Bell has a good plan I'd like to know more about.
Natalie,
The answer to both of your questions turns on the same issue: whether high taxes chase away economic growth. Yes, the whole nation has been doing well economically. Are we doing as well as we could? I think we could do better, but others might reason otherwise.
a billon and more in surplus and the repulicans still raise taxes and raise fees. what a bunch of liers when they call the democrats tax and spend. they haven't been in power in 30 years now!
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