Thoughts from
San Diego on Law, Politics, and Culture

 
A Modest Tax Proposal
By Tom Smith

This is probably an old idea, but why can't we have tax cuts and just start cutting at the bottom and work our way up? Don't get me wrong, I am in favor of any kind of tax cuts. Make consumption deductible; it would be fine with me. But since the complaint about tax cuts is always that the rich get more than their share, why not just take the amount of revenue expected to be lost from a given tax cut, and set an income level below which one would pay no federal income tax, that would give you an equivalent result? As it is, an amazing percentage, apparently something like 45% of total revenues from the federal personal income tax comes from people who make $200K a year or more. People making less than $40K don't contribute much. If the law were, say, if you make less than $30K per year, you just pay NO taxes, the politics of tax cuts would be very different. And undoing those tax cuts would not be so easy, either. Furthermore, if the idea is to stimulate the economy, wouldn't the effect be stronger? Rich people invest, true, but in a global economy that investment is spread out over the entire world. People with incomes under $30K get tax cuts and buy big screen TVs and ATV's right here at home (at least that's what we do in San Diego). While these items are manufactured in Japan, there is a lot of work done in the US distributing them to US consumers. I would think the stimulative effect would be greater if the tax cuts were directed at lower income individuals. (I do not mean to sound Keynesian here; I'm talking about local consumption versus global investment.) And while we're at it, let's pass a bill of attainder making Ariana Huffington pay oh, say, 20% of her past two years income to the federal fisc, (instead of the only $771 she did pay) unless, of course, she agrees to shut up for one full year. I leave the constitutional issues this may raise to wiser heads than I.
posted by thomas at 9/30/2003 07:53:00 PM