Thursday :: Feb 10, 2005

Bill Thomas...Speaking Truth to Power?

by rayman

The intra-GOP squabbling over Social Security and the budget has been a source of amusement for us all. And thanks to Congressman Bill Thomas, of all people, this internal dissension may spread to the nascent "tax reform" proposal the administration is pondering. Bob Novak's panicky column, which skittishly recounts Thomas's skillful demolition of sacrosanct Republican beliefs at last week's West Virginia retreat, is truly a joy to behold:

During the retreat, Thomas revealed some of his cards. While transforming Social Security, he also would repeal the corporate income tax and replace it with a VAT paid by the consumer. Thomas told his colleagues of multiple advantages for the United States in international trade and hinted at a bountiful increase in federal revenue -- money that would be useful in addressing the Social Security shortfall.

Thomas' uncharacteristically buoyant optimism abruptly ended when he turned to the flat tax as a possible simplification of individual taxes. He posed difficult questions to the assembled House members. Would you and your constituents be willing to give up the home mortgage deduction? The charitable contributions deduction? The deduction for state and local income taxes?

Because the answer to all of these questions is obviously no, Thomas went on, the tax rate would have to rise to recapture revenue. But that rate would be too high for low-income taxpayers, and there would have to be at least two rates. There goes your flat tax, with one low rate and no deductions.

So Thomas is honestly interested in shoring up Social Security's finances, and thinks a flat tax and a consumption-based tax would be a raw deal for most Americans. Jeez, what kind of Republican is he? Max Sawicky provides an apt take on this most amusing sideshow:
From my point of view, efforts to increase tax revenue, especially through the VAT "money machine" (Merci bien, Monsieur Grover!), blow up the GOP. Grab a bag of popcorn and enjoy the show.

Indeed I will.

rayman :: 9:51 AM :: Comments (16) :: Digg It!