The Tax Code is 10x Longer Than the Bible, Without the Good News
My headline is a Dave Camp quote. Camp is the 11 term Republican Congressman from Michigan who will chair the House Ways and Means Committee. George Will used the Camp quotable in a column last Thursday that included this gem:
Many conservatives, including Camp, believe that although most Americans should be paying lower taxes, more Americans should be paying taxes. The fact that 46.7 million earners pay no income tax creates moral hazard – incentives for perverse behavior: Free-riding people have scant incentive to restrain the growth of government they are not paying for with income taxes.
"I believe," Camp says, "you’ve got to have some responsibility for the government you have." People have co-payments under Medicare, and everyone should similarly have some "skin in the game" under the income tax system.
Does that read to you like it does to me? Those same Republicans who just weeks ago were running on about how they don’t want to see taxes raised on the wealthy do want to raise taxes on the poor and middle-class. Steve Benen sets the record straight:
When conservatives talk about nearly 47% of the country paying no income taxes, the argument tends to overlook relevant details — such as the fact that these same middle- and lower-class families still pay sales taxes, state taxes, local taxes, Social Security taxes, Medicare/Medicaid taxes, and in many instances, property taxes.
In other words, they already have some “skin in the game.” It’s not as if these folks are getting away with something — the existing tax structure leaves them out of the income tax system because they don’t make enough money to qualify.
But even if we put all of this aside, let’s appreciate the underlying point of the conservatives’ concern — for all the talk on the right about cutting taxes at every available opportunity, there’s also a drive to raise taxes on those who can least afford it. The GOP has a natural revulsion to any tax system, but there’s an eerie comfort with a regressive agenda that showers additional wealth on the rich while asking for more from lower-income workers.
Much the way that Bill Clinton elevated welfare reform following the 1994 mid-terms, major tax reform is an area ripe with bipartisan appeal and the potential to improve the Administration’s fortunes, whatever the Republican response. The tax code presents a major opportunity for significant action on a domestic priority during the coming Congress. Potentially, much of the energy to drive tax reforms to passage could stem from Tea Party supporters.
Tax reform should be built on two issues important to Republicans: simplification and a shift from income and payroll taxes, which are predominately taxes on work, toward a national consumption tax, as many in the Tea Party have advocated. However, these measures should be sculpted in such a way that they do not become figleaves for regressive taxation that falls disproportionately on the lower ranges of the income spectrum.
Lest we think tax reform will be easy in the current political environment, Ezra Klein points out that the pols can’t even agree on what revenue neutral means, “Democrats will say it means revenue after the cuts expire, and Republicans will say it means revenue if the cuts were extended.” He goes on:
Conservatives want lower taxes, particularly on the rich. They want a larger percentage of Americans to pay federal income taxes, as they believe that paying federal income taxes makes you less likely to support federal spending (Question: Is there any evidence for this view?). They want major cuts in existing government programs and a high bar to creating new programs, which means total revenues have to remain below current spending and far below projected spending.
Liberals have their own concerns: They want more revenues, as they know that their programs can’t survive forever unless taxes rise to meet spending. They want the tax code to be more progressive, and they want to see inequality fall. They want taxes on wealth-income brought into line with taxes on work-income. They want the social spending that runs through the tax code, like the Earned Income Tax Credit or the breaks for clean energy development, to survive, and even be expanded.
I’ll be watching Obama. He got health care reform. He got (arguably) two stimulus packages. He got DADT repeal. If he wants tax reform, he gets it. And Camp will be left clutching his Bible.