Jan Ting, 11/7/2011 [Archive]

Mitt Romney, Political Weathervane, Now Supports a Flat Tax!

Mitt Romney, Political Weathervane, Now Supports a Flat Tax!

By Jan Ting

Each time that Mitt Romney changes his position on an issue to conform to the extremist consensus among his rivals for the Republican nomination for president, it's one more sign that extremists now completely dominate the GOP and that there's no place any longer for moderates in that party.

So when Romney switched from the pro-choice position he held as the Republican governor of liberal Massachusetts to a hard line, pro-life, anti-abortion position, that told us something both about Mitt Romney and about the current state of the GOP.

When Mitt Romney flipped from the pro-gay rights position he held as Massachusetts governor to opposing the right of same-sex couples to marry, and the right of openly gay Americans to serve their country in the military, that told us there's no room for Americans with different views in the GOP.

And now Mitt Romney, who previously condemned the flat tax proposal of former presidential candidate Steve Forbes as "a tax cut for fat cats", announces that he thinks the flat tax is a good idea."I love a flat tax," he now says, falling in line with his Republican rivals Herman Cain, Rick Perry, Newt Gingrich, etc.

The first problem with all flat tax proposals, whether it's Cain's 9 percent tax, or Perry's 20 percent optional tax, or Gingrich's forthcoming 15 percent tax, is that they all give a huge tax cut to taxpayers with the highest income, while raising taxes on the middle class, and on the lowest income taxpayers, many of whom do not have enough income to owe any current federal income tax.This will accelerate the widening wealth gap and the concentration of wealth in the hands of the few.

The second problem with all the current GOP flat tax proposals is that they complete the effort begun by George W. Bush to completely eliminate the federal income tax on dividends from stock, and on long-term capital gains from the sale of stock.All proponents of the flat tax on income also support the complete elimination of federal estate and gift taxes on the transfer of wealth from generation to generation.Who currently pays most of these taxes targeted for elimination?You know who.Poor people don't pay these taxes.Middle income people don't pay much if any of these taxes.

The third problem with all the flat tax proposals is that they result in reduced federal tax revenue, which will lead to even larger budget deficits and further big increases in the national debt.Flat tax proponents say they will offset some of the lost federal tax revenue with reduced spending.All candidates say they will cut spending if elected.But they never do.

Rick Perry's flat tax proposal has the additional detriment of making income tax calculation even more complicated and burdensome than it already is by maintaining the current tax system in its entirety, and then offering the additional option of paying the 20% flat tax instead.For many taxpayers this would require calculating their taxes both ways to see which method would be more beneficial.Only the highest income taxpayers could pay the flat tax with confidence that it reduces their tax liability from current levels.

The complexity Americans hate in our income tax system is not due to the progressive rate of taxation.Taxes are easy to calculate once you determine taxable income.The complexity arises from having to calculate deductions to subtract from gross income in order to determine taxable income.

Eliminating tax expenditure deductions would both simplify calculation of income taxes, and simultaneously generate much needed additional federal tax revenue.The benefits from such deductions are proportionate to a taxpayer's highest tax bracket.The highest income taxpayers benefit the most from such deductions.

Eliminating popular tax expenditure deductions like those for interest on home mortgages and for charitable contributions would actually be progressive.Flattening the rate of income taxation would be very regressive.But the flat tax is what the GOP wants.So that's what Mitt Romney has to give them to stay in the race for the Republican presidential nomination, even if he knows that the flat tax is just "a tax cut for fat cats."

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©Copyright 2011 Jan Ting, distributed exclusively by Cagle Cartoons newspaper syndicate.

Jan Ting is a Professor of Law at Temple University's Beasley School of Law and a former Assistant Commissioner for Refugees, Asylum and Parole, Immigration and Naturalization Service, U.S. Department of Justice. Jan can be reached at janting@temple.edu.

This column has been edited by the author. Representations of fact and opinions are solely those of the author.




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