Wednesday, October 26, 2011

Yet Another Tax Plan to Benefit The One Percent

Bring out the popcorn. This is such a fun one to watch. Rick Perry, yet another wingnut candidate for the presidency of the most powerful country on earth, has come up with his own flat tax plan. It's a beauty, on so many levels.

But all you really need to know about these flat tax plans is that they share one important characteristic: They will cut taxes of the very wealthy:
The plan is optional, meaning that low- and middle-income families that benefit from refundable credits will stay in the current system.  High-income taxpayers will jump at the chance to avoid paying tax on interest, dividends, capital gains, rents, royalties, and other capital income. That is a large share of their income, and it would be exempt under Perry's plan. And the 20% rate is much lower than the current top rate of 35%. And, moderately well off people get to keep the most popular deductions.
The only logical conclusion about a plan like that is that it would drown the government in that proverbial bathtub, because it would not collect enough taxes to finance much anything.

But much more importantly, it would benefit the very rich. Given the current money-based democracy the United States seems to have developed, that is to be expected. No politician has any great appetite to go against those who finance his or her campaigns. And given the increasing income and wealth inequalities of this country, that money comes from the one percent.

That is the real problem, and not only for Republican politicians.