It’s baaaaack …
“Republican presidential candidate Rand Paul unveiled his version of a flat tax on Thursday, proposing to “blow up the tax code and start over “in a Wall Street Journal editorial. … A flat tax has long enjoyed support among some elements of GOP. … In this cycle, several GOP candidates have advanced some form of a flat tax. … ‘The flat tax is good policy,’ Dan Mitchell, a senior fellow with the conservative CATO Institute, told CBS News in April. … Left-leaning experts, though, … [are] not convinced a flat tax can be structured in a way that prevents poor families from sustaining a tax hike.”
A common feature of conservatives’ flat-tax proposals is to lowball the tax rate required to remain revenue-neutral and thus avoid the Hobson’s choice between ballooning deficits or crippling austerity. For example, the so-called “Fair Tax” that would replace the federal income tax with a federal sales tax, would require an effective sales tax of 30% on purchases (on top of existing state and local sales taxes) to remain revenue-neutral. And, like state and local sales taxes, such a tax would be highly regressive, because low-income people spend more of their income.
Like many of his flat-tax predecessors, Rand Paul argues lower tax rates will increase, or at least maintain, revenues by stimulating increased economic activity. In fact, the Reagan tax cuts of the 1980s and the Bush tax cuts of the 2000s both caused massive deficits.
This is the real truth about the tax schemes hatched in conservative think tanks and peddled by rightwing politicians:
“You’d have to see the [Congressional Budget Office] scores, but many of the proposals that have been floated, once they’re scored, you find out the flat tax rate would have to be much higher than the advocates tend to want in order for them to be deficit neutral. Or the tax would have to hit a lot more people than they might envision, and that would make it far more regressive,” Bernstein explained. “At the end of the day, it’s very hard to make the numbers work out.”
In other words, just as with conservative budget proposals, the math doesn’t work and the promises are pie-in-the-sky. (Sources: Click here and here.)
Photo: Rand Paul is just another Republican politician who can’t count on his fingers.