From: pjm@anegada.sps.mot.com (Patrick J. McGuinness)
Subject: Re: why progressive tax rates (was Re: Clinton's Economic plan attacked)
Organization: Motorola Inc., Austin TX
Date: Thu, 13 Aug 1992 23:18:03 GMT

In article <1992Aug13.023553.20420@cs.tulane.edu> lang@cs.tulane.edu (Raymond Lang) writes:
>In article <1992Aug12.184651.15727@oakhill.sps.mot.com> pjm@anegada.sps.mot.com (Patrick J. McGuinness) writes:
>>The solution then is to lower tax rates. For Joe taxpayer.
>
>Then you're back to a progressive tax structure: the guy with the higher
>income is still paying higher marginal rates, which BTW, is the way I
>think it ought to be.

Not necessarily ... a flat tax would lower the rate even for middle-income
taxpayers, and I would favor reducing the SS tax bite, and revamping
items like the earned income tax credit so it doesn't add to the
marginal tax rate so much.

>>It also stands to reason, that, given the fact that the income
>>tax raises revenue equal to only about 12% of GNP, that we can easily
>>lower the rate (while also braodening it) and stil raise
>>adequate revenues.
>
>Well, unless we cut spending quite a bit, a "revenue neutral" change
>in the tax code won't _be_ adequate.

Revenue neutral means raising the same amount of taxes as the status quo.
But if we make the tax code kinder and gentler on economic incentives,
it will, due to greater economic growth and less tax avoidance, raise
more money than the current system in the long run.

If this isn't adequate, then we should cut spending.

>>>To switch topics somewhat, it occurred to me that this discussion about
>>>tax rates has overlooked an important point: income taxes are only a portion
>>>of the an individual's total tax burden.  It is true that our federal income
>>>tax structure is mildly progressive; but, as a matter of fact, when you
>>>consider all the taxes one must pay (social security (very regressive in
>>>itself), state income, sales, etc.) the complete tax structure in this
>>>country is actually mildly regressive.
>>
>>Bingo.  So how come only conservatives like Jack Kemp are concerned
>>about the excessive taxation on the working poor, or the
>>high marginal tax rates on someone making $11,000 a year.
>>(Which in some cases are above 50% and even close to 100% when
>>welfare and earned income tax credits are added in!)
>>
>>How come the only solution the Dems can come up with is blame
>>Reagan/Bush and raise taxes yet again?
>
>Well, unfortunately, Kemp is not running for president (not yet,
>anyway). So how does _Bush_ propose to alleviate the tax burden on
>the poor?

I would propose Bush takes Kemp's plan and runs with it.

>Does he think they'll benefit from a capital gains tax cut?

Yes. They'll benefit more than they will from raising taxes, for sure.

>Maybe they can use his school vouchers to get their kids into a
>nice, private school away from the inner city

Many private schools are *in* the inner city, serving the poor.
Bush's voucher plan will help them, and will help improve the
education of many underpriviledged students who need and deserve
a choice of a better education.

>(heaven forbid we
>should use public money to improve public schools).

We are spending $300 billion on public education now ... how much is
enough?

>In any case, Clinton has made some very solid proposals for welfare
>reform and education reform aimed precisely at helping the working
>poor.

I have seen no significant reform proposals at all. At best, he favors
weakened versions of plans Republicans have been pushing for years
against obstinate pro-status-quo types on capitol hill.
At worst, he is engaging in 'trojan horse' bait-and-switch, with
'reform' and 'infrastructure' being code words for 'let's add yet
another Govt program'.  On education, he has sold out to the NEA and AFT,
and opposes real school choice.

> He has not simply blamed Reagan/Bush and proposed raising taxes.

.... oh no, he proposed new spending too. How forgetful of us. :-)

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P.McGuinness
Xref: sparky alt.politics.elections:11148 misc.education:3184