George Bush does Tax Reform
 

What? George Bush is actually trying to reform taxes? Yes, indeed he is currently trying convince Congress and Senate to change our tax system to a fixed percentage system. This means that all Americans (excluding the ridiculously poor) will have to pay a fix percentage on their taxes. This includes the rich. Part of the plan is going to be to abolish all loop-holes that help the rich out of paying taxes. Under this bill, all Americans will only have to pay 5% of their income on taxes to earn what the government currently gets from taxes. And the wierd thing is the rich actually support the plan.
(source=National Public Radio).

- Your thoughts views on this interesting developement (OMG, a president is actually sticking to his word when he doesn't have to get re-elected? That's insane!)

Well, of course the rich support the plan. They'll pay about the same rate that they have been and they won't have to go find loopholes (not that there will be many left).

Also, 5%? That doesn't sound right. There's a pretty good that I have no idea what I'm talking about, but that seems so low that it would be unrealistic. Even I, a huge supporter of lower, simpler taxes, must say that 5% from all Americans doesn't sound like it's going to happen. I think it's probably more like 10%-15% (though I have no evidence of that at this time)

This is one of two things:

1. Bush trying to build his legacy, i.e., do some "great" deed that he thinks history will adore him for.

2. The long, tireless work of countless lobbyists.


As temptingly simple as a flat income tax combined with a national sales tax sounds, it aint gonna work. I myself think a Tobin tax (1% tax on all short-term speculative investments) is the way to go, but it'll be a cold day in hell before that gets passed.

The amount of money the rich should pay on taxes, and the amount they actually pay are so different, that most of the tax money in our current system should come from the rich, but they, in fact, find ways to escape it, leaving the rest of America to pick up the tab. So 5% for everyone without loopholes is sufficient as long as the rich pay up as well.

I once heard the theory that supply side economics was actually a conspiracy to shrink the government farther than most people would consider reasonable. I dismissed it as interesting, but far too Snidely Whiplash for any real person to attempt.

The theory goes like this.

The supply side economists feel that government has gotten far to large and needs to be cut back farther than the general population would ever allow. The first step is to shift the tax burden more and more onto the poor using methods like a lopsided tax cut or even a flat tax. Then incur enormous debt and show the people how there either “forced” to raise taxes or decrease spending to a ridiculously small amount. Since the lower classes are under a much heaver tax burden then before the “tax reform” they will see the only option

Think about it, the two most supply side president’s (Regan and Bush2) both created the two largest debts in American history. And they never stop complaining about big government.

I still don’t believe this is the case, but I’m not as convinced as I was before.

Is supply side economics and Keynesian economics the same thing? I've yet to learn all the differences in the economic scales.

Keynesian economics says that any creditor nation (a nation that loans money to other nations) MUST be a net importer (as in send money outside the country) or it will never get its money back everything will be fubared. I have to say I'm pretty suspicious myself. It could be the legacy thing. Currently, the rich are "supposed" to pay 35% taxes on their income (Rich = Anyone over 200,000), next is under 200,000 is 28% and under 20,000 is like 10% or something else thats negligible.

As for the tax reform thing, I'll believe it when I see it. I'm totally not in favor of flat taxes.

Flat taxes are still a percentage of your income, so when the rich pay 5%, they pay alot more than when the poor pay 5%. I've never like the word "flat" when it comes to taxes, because it implies that each group is paying the same amount of money. In flat taxes, they really aren't giving the same amount. They're just paying the same percentage.

You may be right about that chaos mage but the effective difference between supply and Keynesian economics is as such. The Keynesian reply to a depression is to lower taxes, primarily to the lower classes, and increase spending on job creation, thus increasing the demand for products and jump starting the economy. The supply side solution is to cut taxes to the rich so they will build factories and the like, create jobs and thus create more demand. But it fails to realize that you can’t create enough demand by starting a new factory for the factory to be successful. You don’t start a busses if there isn’t a demand already present, if you do it folds.

Bush supports a Flat Tax? where'd you read that?