>That's pretty much what I used to think. But then I started hearing Jerry
>Brown talking about a flat tax, and I began to see that there are many ways
>of writing a flat tax. Just as there could be many ways of writing a VAT,
>and when I set my own mind to it, I had all kinds of fun deciding what sort
>of percentages to apply to minks and mercedes.
Brown's plan was written by Arthur Laffer, the author of the famous curve on a cocktail napkin. It combines two different right-wing dreams, a consumption tax and a flat income tax. Both spare capital and sting labor. William Seidman, the Republican politico who's now CNBC's chief commentator, said of Brown's plan that it was the biggest gift to the wealthy in history. In my anti-Brown rant <http://www.panix.com/~dhenwood/Jerry-Brown.html>, I cite this Congressional Budget Office analysis of Brown's plan:
____________________________________________________________________________ EFFECT OF BROWN-STYLE TAX PLAN, BY INCOME GROUP
income after tax effective tax rates*
__________________ _________________________________ quintile avg % change 1992 actual after change change poorest $ 6,700 -21.7% 7.7% 27.7% +20.0 second 14,800 -11.0 15.2 24.5 + 9.3 third 23,100 - 5.3 19.1 23.4 + 4.3 fourth 32,400 - 1.3 21.7 22.7 + 1.0 richest 70,300 + 6.8 26.7 21.7 - 5.0 all 29,200 0.0 23.1 23.1 0.0
*Effective tax rates are the taxes people actually pay as a percentage of pretax income, in contrast with statutory rates, which are the numbers on the books that no one pays. ____________________________________________________________________________
Brown ally Alex Cockburn defended the tax scheme on NPR in 1992 by saying that "a flat tax can be progressive." Milton Friedman, who was on the other line, said he welcomed support wherever it came from, but he'd prefer people understood what they were supporting.
Taxing minks & Mercedes would still spare the rich, since the very upper brackets save 30% or more of their income.
>The major advantage of a flat tax written by progressives would be to exempt
>completely the lower 80% of the income scale.
What you're talking about is conceptually a steeply progressive income tax, just like in the Communist Manifesto! Why sacrifice the principle and embrace the "flat" name?
Whenever I've done talk radio about flat tax schemes, I find that most people think the federal system is regressive on balance, when it's progressive, and most people object to complexity and loopholes, not the rate structure. So they embrace flatness because they think it'd actually *increase* taxes on the rich, and because they like the simplicity of it. These beliefs, though, seem structured at the level of fantasy, and it's hard to break them up with rational argument.
>You're the expert, Doug, and I should probably shut my big mouth.
Oh heavens no. The last thing an "expert" needs is for people to shut their mouths.
Doug