What real tax reform would look like

You’ve seen the Republican plan.  And it’s just what we knew would come out of the party of Trump:  massive tax cuts for the rich, tax increases for everyone else.  This is not new.  Here’s Paul Krugman describing the Republicans’ ideas in 2011.

[W]hen the GOP claimed that deficits don’t matter, it called for privatizing major social insurance programs while cutting taxes on the rich, and now that it claims to be deeply concerned about deficits, it calls for privatizing major social insurance programs while cutting taxes on the rich.

What would a really progressive tax plan look like, something that could properly be described as reform?  It would have to actively reverse not just income inequality, but wealth inequality.  It would have to address the fact that the recent depression wiped out a generation of wealth accumulation by Latinos and blacks.

  • The estate tax should be increased, not eliminated.
  • The federal income tax should be steeply progressive, that is, those with higher incomes should pay more than they do now.  The top rate should be north of 50%.
  • The payroll tax should be eliminated.  It’s a regressive tax that hits working people hardest.  If you want to know who is serious about cutting taxes on working people, see if they’re making a lot of noise about cutting income taxes, which the working poor don’t pay, or the payroll tax, which the working poor do pay.  The Social Security trust fund should be funded by the income tax.
  • Regressive state and local taxes should be outlawed.  I’m looking at you, sales taxes.  The difference should be made up from income taxes.
  • A wealth tax on the largest fortunes should be levied annually.  A few percent off a vast fortune, is still a vast fortune.  Trump proposed this in 1999, so let’s pretend he was serious and make it happen.

This should be the minimum set of demands by Democrats, and if Democratic candidates won’t support it, let’s get some better Democratic candidates for 2018.

What do you think?  Register on this blog and let’s discuss it.

Leave a Reply

WordPress spam blocked by CleanTalk.