Tuesday, October 25, 2005

Republicans Denouce Reagan As "Too Moderate"

I didn't like the editor's choice for my headline this week because I think it's not correct. I thought that the 2001 and 2003 tax cuts were so much larger than the tax increases in 1991 and 1993 that restoring the 1986 tax code would actually be an increase; the only roll back is only in the number of pages in the Code and in the forms. But it's a useful point to make, that today's Republicans would be opposed to reinstating the 1986 tax code because they've moved so far to the right that they can't support what Reagan actually did because it's too centrist. Thus, my choice for the headline, above.

I bet one of my law partners dinner that Harriet Miers would appear before the Senate Judiciary Committee, that her nomination wouldn't be withdrawn before then. After all, aren't conservatives supposed to believe that every nominee deserves an up-or-down vote? And why would the Bush administration start caring suddenly about doing things with majority support?

Finally, root for the White Sox. We can't let Houston win the World Series; hasn't Texas made the rest of the country suffer enough already?

ROLL BACK THE TAX CODE TO REAGAN-ERA LEVELS
East Valley Tribune, Oct. 23, 2005

The quasi-release of recommendations from President Bush’s long-awaited tax reform commission prompts me to release my own far simpler and far more surprising tax reform plan.

So far, Bush’s commission proposes to make your health insurance taxable and to limit your home mortgage deduction. They want to do that to pay for full repeal of the alternative minimum tax, so rich people who have lots of loopholes won’t have to pay income taxes.

Even without this bone-headed idea, the commission already seems like a loser. The basic problem is that any laundry list of tax proposals immediately fractures any sort of coalition for reform.

People don’t look at the overall picture, but instead evaluate whether each single proposal benefits or hurts them. Tax reform requires logrolling. Unless you must swallow it whole, a list only lets those of us from Arizona explain why a tax credit for replacing air conditioner filters is essential for American competitiveness, while deductions for public transit is tax pork.

So I have my own seamless, complete tax reform package: Let’s re-adopt the Internal Revenue Code of 1986, exactly the way that Ronald Reagan signed it.

Every change to the tax code since then gets removed. We roll the clock back to 1986, when the Gipper was president and Bob Dole ran the Senate and Republicans hadn’t taken money yet from Jack Abramoff.

There’s something for everybody in my proposal. Politically, Republicans keep pretending that the first President Bush and both Clinton terms never happened -- and, tax-wise, that’s fine with me. Democrats get something equally valuable, a complete do-over of George W. Bush tax policy. (It’s the reverse of the classic The Onion headline from 2001, “Bush: ‘Our Long National Nightmare of Peace and Prosperity Is Finally Over’”.)

Economically, it’s a win for the country. We have fewer brackets, forms, deductions, and credits. The code and the forms required each April become shorter and less complex.

Fiscally, it’s also a winner. The tax hikes in 1991 and 1993 were more than outweighed by the back-loaded and top-weighted cuts in 2001 and 2003. Unlike in 1986, we now tax income from capital and wealth at far lower rates than income from work. We can keep the nominal top rate at 1986 levels, as long as we tax dividends and capital gains like how we tax salaries, just as Reagan did. Given the increase in income inequality and the continued multiplication of CEO salaries over those of the actual workers in most corporations, we wouldn’t run Reagan’s deficits, either.

I’d like to make a couple of tweaks to the 1986 code. We should keep the increases to the earned income tax credit, and “percentage-index” the alternative minimum tax and estate tax so both affect exactly the same percentage of taxpayers as each did in 1986. But if making those changes open the door to any of the lobbyist-driven, fiscally-irresponsible, and wantonly-regressive changes made since 1986, then forget it. Better to take my Reagan pure than to give this corrupt Congress a chance to fish for campaign contributions by rigging the tax code yet again.

There’s no reason put Reagan’s name on airports or his face on Mount Rushmore. He wasn’t the kind of guy who wanted special treatment or personal honors; he was just a regular guy who happened to be president, right? So if Republicans really want to honor him, why not re-enact his version of the Internal Revenue Code? It’s already been written, and Congress could pass it and the president could sign it tomorrow.

So let’s get rid of the past 19 years of mistakes and political favors, and go back and party like it’s 1986. Since then, the Republicans have moved so far to the right that they’d probably dismiss Reagan as a (ugh!) moderate, so it’s up to this die-hard Democrat to promote the actual substance of Reaganism. What’s happened to the tax code since 1986 only makes me nostalgic for Ronnie. What about you?

The Internal Revenue Code of 1986: Let’s do it -- for the Gipper!

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