Didn't a VAT destroy the New Democratic Party in Ontario, Canada?
Your email pal,
Tom L.
Doug Henwood wrote:
> Daniel wrote:
>
> >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