Today Harold Ford, Jr. [Ed. Curious to note the completely blank webpage without even any hidden text indicating a run for governor in 2010.] penned an op-ed for the Washington Times, brought to us by the Rev. Sun Myung Moon.
Here is the meat of Jr.’s proposal:
To address the challenges of the middle class, Democrats should advance an agenda that aims to do something loftier than just repeal the Bush tax cuts on millionaires. It should boost incentives for average Americans to increase savings and investments, and help them participate more fully in the upside of economic growth.
Toward that end, here are a few ideas that will help more people share in the rewards of the modern economy:
- Middle-class flat tax: This is simple and fair: no middle-class family with an income of under $150,000 should ever pay an effective tax rate of more than 10 percent. If what they owe after calculating their taxes is more than 10 percent of their income, they won’t have to pay a dime above 10 percent. If they owe less than 10 percent, they pay the lesser amount.
- Permanent capital-gains tax cuts: Long-term capital gains tax rates now are between 5 percent and 15 percent. The rates are progressive: People in or below the 15 percent personal income tax bracket (which applies to married couples making $60,000) get the lower capital-gains rate. We should lower the capital-gains tax even further for people making up to $100,000 a year, provided they hold the asset for up to five years. Thus your tax would be 4 percent if you hold the asset for three years, 3 percent if you hold it for five years. This sliding scale for taxing capital gains will encourage investment and increase savings for a majority of Americans.
- Cut corporate tax rates to 30 percent: America has one of the developed world’s highest corporate tax rates. Let’s change that by lowering the corporate tax rate from 35 to 30 percent â€” with an even lower rate for new knowledge-based industries in energy technology, biotechnology and other science-rich sectors. We should follow House Ways and Means Chairman Charles Rangel’s lead and cut the corporate tax rates from 35 percent to 30 Â½ percent,
All these proposals would be paid for by eliminating inefficient tax loopholes and wasteful corporate subsidies. We can also pay for it by modernizing the financing of Social Security and Medicare.
When Democrats, liberals, or progressives (a distinction between the latter two nicely made by Paul Krugman when we spoke to him) lead with taxes, they lead with a glass jaw. Note how Mr. Ford attempts to take the edge off by using the phrase “flat tax” in his piece, as if that’s going to fool either Mr. Norquist or Rush Limbaugh, who will always find a way to make any Democrat look like a habitual tax-raiser.
Personally, I think Democrats, liberals, and progressives should lead with the budget. For it is the budget that is the cause of taxation in the first place. I realize that voters (and non-voters, actually) feel the pull of the metaphorical lever in their wallets come Apr. 15th, and I would certainly be in Mr. Ford’s middle class that would benefit from his flat tax, but I also would love to see more of our politicians speak with as much passion about their budgetary ideas as they do about their ideas for collecting revenue.
John Edwards is, in my opinion, doing the best job of this in the Democratic primary. He has issued more and more in-depth policy proposals than any of the competition (on either side). And he is not shy about the fact that his ideas cost money. But at least we have a clear understanding of what he’s asking us to pay for.
Mr. Ford, on the other hand, vaguely references a covenant with Social Security millionaires as a potential cost-savings device. I think this is the germ of a sound idea, but we really need health care reform more than anything. And it’s couched in an essay all about taxation, and one that caters to pro-business anti-taxers, at that.
Frankly, I think Democrats would do themselves a favor to become more budget-oriented in their emotional appeal. It would force some tough decisions and healthy discussions. Much healthier than how often they should mention God. We need more transparency with regard to the process of earmarks. We need better explanation of each aspect of the budget and how it is created. We need to know more about why we’re being taxed in the first place.
Here’s the bottom line: very, very few people will ever consider themselves fairly or appropriately taxed, especially comparatively (e.g., “Why does Rupert Murdoch get all those cushy tax breaks for his corporation and lack of clearly stated income?!” and “Why should I pay more simply because I have more? After all, I inherited—er, worked—hard to live the American dream!”). Thus, anyone in the spectrum of Democrat, liberal, or progressive will be beating their heads against a wall of Grover Norquists and Ben Cunninghams.
Taxes are an emotional issue, and it’s much easier to speak out against the raw idea of a tax increase than it is to get the blood boiling over quality public school infrastructure (getting to teachers and curricula is a secondary, more complex issue) or access to health care or appropriate social welfare. Sure, there are ideologues who, like Norquist, want to drown the federal government in a bathtub (unless it’s pre-emptively invading other countries or providing monopolies to professional sports teams), but voters are much less rigidly ideological than such pundits.
In fact, I think it’d be healthy for the nation as a whole if we had a broader conversation about the Ownership Society and the rugged individualist versus the all-in-it-together social safety net. But don’t ask me how we’re gonna pay for it…