Wednesday, October 26, 2011

Tax Reform Polls & Tolls


GOP candidates 2012
Have you noticed lately all the politicians are jumping on the flat tax rate bandwagon in the hopes of winning favor with voters?  According to today’s Rasmussen Reports daily Presidential Tracking Poll[1], President Obama’s approval rating is at a new low.  40% of Americans strongly disapprove of the President; this drop comes on the heels of Obama’s Buffet Rule and Jobs Act proposals.  Don’t Americans want lower taxes and better education and transportation infrastructure?


Cain/AP Joe Burbank pool file
To answer these questions, we must understand the popularity of the 9-9-9 plan proposed by GOP candidate, Herman Cain, and why his plan has won support with Republican voters.   Cain’s plan proposes a flat 9% income and 9% corporate tax rate.  According to another Rasmussen poll[2], 56% of GOP voters like Cain’s tax reform plan.  No wonder the GOP candidates loaded up the wagon and started rolling out their own flat tax rate and tax reform proposals.  Governor Rick Perry unveiled a  20% flat tax rate plan this week, Newt Gingrich wants a lower 15% rate, Michelle Bachman and Ron Paul both want to drop federal income taxes altogether.


Sugarplums are dancing in our heads!  No more shock and awe when the government takes a sizeable chunk out of our paychecks?  If it sounds too good to be true, it probably is. The “catch” is this:  there is another 9 in Cain’s plan - a 9% federal sales tax.  It would tack on an additional 9 cents for federal sales tax to every dollar spent on consumer purchases.  Consumers will pay in the range of 13% to 25% in sales tax, for all taxable goods and services, under Cain’s tax plan.


According to data from the IRS tax returns filed in 2009, 47% of Americans had no income tax liability.  That would change and everyone who filed an income tax return would pay the same percentage under a flat tax rate plan.  An analysis done by the Tax Policy Center found that while the majority of all filers would see some increase in their taxes, the wealthiest filers would benefit from a sizeable decrease.  The analysis also determined that the total tax income would not generate more revenue than our current tax plan.[3]


Congressman Ron Paul
Half of all Americans agree their taxes are too high[4] (and this agreement likely comes from the half who actually has a tax liability).  Republican presidential candidate, Ron Paul, would like to completely scrap the IRS and federal income taxes.   The Ron Paul 2012 Presidential Campaign Committee website states that “While a Flat Tax or a Fair Tax would each be a better alternative to the income tax system, Congressman Paul believes we would have to guarantee the 16th Amendment is repealed to avoid having both the income tax and one of these systems as an additional tax.”  Ron Paul has been voicing his plan for reform for many years.  He claims that funding to the federal government would be sufficient in the form of excise taxes, non-protectionist tariffs, and massive cuts in spending.


No one wants to pay taxes, so why not do away with the IRS and income taxes?  Without federal income tax returns, there would be no budget for social programs.  The Center on Budget and Policy Priorities states that 61% of all federal income dollars go to Social Security, Defense/Security and Medicare programs[5].  Only 3% of those dollars went to education and 3% to Transportation Infrastructure in 2010. 
Vote 2012/peacemonger.org
Unless Americans are willing to see senior citizens homeless and without basic healthcare, we will be stuck paying federal income taxes.  The solution to our current economic mess can only be found if “We, the People”, elect a president and representatives who are capable and willing to reform the tax system and the federal spending budget.    


[1] RASMUSSEN Reports, October 26, 2011.
[2] RASMUSSEN Reports, October 11, 2011.
[3]http://www.taxpolicycenter.org/taxtopics/Cain-9-9-9-plan.cfm
[4] Gallup's annual Economy and Personal Finance poll, conducted April 7-11.
[5] Center on Budget and Policy Priorities / www.cbpp.org

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