F6, re the Skinner case seems since Judge Clinton Averitte ordered the evidence turned over for DNA testing, and since under Texas law now it could be, it should be .. wonder why the judge didn't make it mandatory?
Flat Tax Proposals Are Perpetual Fount of False Promises: View
Illustration by Bloomberg View
By the Editors Oct 24, 2011 6:00 PM CT
Texas Governor Rick Perry is scheduled to unveil a flat tax today, which will bring the number of Republican presidential candidates backing some form of the idea to three and a half.
A 9 percent flat tax is one of the nines in Herman Cain’s 9-9-9 plan. Newt Gingrich supports an optional flat tax, meaning that taxpayers can opt for a flat tax or file their taxes under the current system, which is what Perry has in mind, as well. The half supporter is Mitt Romney, who, characteristically, says he wants a “flatter” tax but has avoided being pinned down.
People want their taxes simpler, fairer and lower. A flat tax promises all three and would deliver on none.
Let’s start with “lower.” Taxes cannot be lower for everyone and still raise the same amount of money. For each dollar your taxes are lower, someone else’s must be a dollar higher. Yes, cutting taxes may cause people to work harder and thus increase government revenue. This hope masquerading as a theory has dominated conservative economic thinking for three decades, despite all evidence to the contrary. If you want to give everyone a tax cut -- under the current system, under a flat tax or under any other arrangement -- all you have to do is lower the tax rate. This has nothing to do with flatness.
Would a flat tax be “fairer” than the current system? Perry plans to call for a rate of 20 percent, which is lower than today’s top rate of 35 percent and higher than today’s lowest rate (which is zero). If your income currently puts you in a bracket higher than 20 percent, a 20 percent flat tax constitutes a tax cut. If you’re in a bracket lower than 20 percent, a flat tax will constitute an increase, unless it comes with lots of deductions, in which case it’s no longer flat. If lowering taxes on high incomes and raising taxes on low incomes would be an improvement, then a flat tax is fairer than the current code. Otherwise, it isn’t.
Finally, would a flat tax make paying taxes “simpler”? Under Gingrich’s and Perry’s “optional” arrangement, people will have to figure their taxes twice in order to decide which system to pay them under. That’s not simpler.
Even if the flat tax was the only option, this wouldn’t make the tax code much simpler. Multiple brackets add one line and one simple calculation to the chore of computing your taxes. What causes the tremendous complexity of the tax code is defining taxable income. Some complexity is unavoidable in a complex economy. Some of it represents the hard work of lobbyists for special interests. None of it has anything to do with tax rates or how many brackets there are.
We’re not opposed to reform that cuts loopholes, ends subsidies and lowers tax rates. But any reform must make the tax code more progressive, not less.
To contact the Bloomberg View editorial board: view@bloomberg.net.
Rick Perry’s flat tax plan: Everything you need to know
The Texas governor is seeking the 2012 GOP presidential nomination.
Video During a speech at the Western Republican Leadership Conference, Rick Perry on Wednesday said he'll introduce a plan next week to replace the current tax code with a federal flat tax, "simple" enough for Treasury Secretary Timothy Geithner to understand. (Oct. 19)
The plan would dramatically reduce taxes, particularly on wealthy Americans and corporations. It would reduce the corporate tax rate from 35 to 20 percent, eliminate taxes on dividends and many capital gains and essentially cap individual tax rates at 20 percent.
Perry argues these tax cuts will spur economic growth by creating a more favorable environment for wealthy individuals and corporations to start or expand their businesses. But without significant spending reductions, the tax cuts could drastically increase the federal budget deficit.
“Taxes will be cut across all income groups in America, and the net benefit will be more money in Americans’ pockets with greater investment in the private economy,” Perry said to an audience of more than 200 inside the factory at ISO Poly Films, Inc. in this South Carolina town.
2. Can he keep it simple? Cain’s plan caught on because it had the catchy 9-9-9 slogan. Then Cain went all apples and oranges and muddied up the simplicity of his plan. Perry doesn’t have a slogan so far and having to figure out whether to opt in or opt out offers its own complications.
3. Will it be revenue neutral? Lower taxes for the rich spur growth, creativity and job creation, or so the argument goes. But under Cain’s plan, for instance, government coffers would be in the red by $300 billion less according to the Tax Policy Center analysis [ http://www.taxpolicycenter.org/taxtopics/Cain-9-9-9-plan.cfm ].
4. Will the tea party like it? Dick Armey, the tea party king, is a big fan of the flat tax and says the flat tax system would be so simple that people could do their taxes on an index card [ http://www.pbs.org/newshour/bb/congress/armey%27s_flat_tax.html ]. Yet, to quote Michele Bachmann, the devil has been in the details, and flat tax rates, once examined, have often ended up looking like a tax hike.
5. What will Mitt say? Romney has largely been opposed to the flat tax, saying at one point that it was a “tax cut for fat cats [ http://www.nytimes.com/2011/10/24/us/politics/mitt-romney-changes-his-tone-on-flat-tax-plans.html ].” But now that the plans are all the rage, the former Massachusetts governor has a tightrope to walk on the issue. This could be his chance to frame the flat tax as a middle class issue.
Cain’s plan would eliminate the current tax code, replacing it temporarily with a 9 percent income tax, 9 percent business transaction tax and 9 percent federal sales tax. Then, all taxes, including the 9 percent taxes, would be replaced with a single, national sales tax in the style of the “Fair Tax [ http://www.fairtax.org/site/PageServer ].”
Ultimately, while Cain promises a tax cut, his plan would actually mean a tax hike for millions of lower-income Americans who currently benefit from the earned-income tax credit and other deductions built into the existing tax code. And, as Kessler notes, it’s highly unlikely that, given the complex nature of the tax code and the numerous hoops changes to the code must go through, that a Cain Administration would be able to successfully implement changes three times over.
Regardless of where you stand on the 9-9-9 Plan, there’s no question Cain is thinking outside of the box when it comes to overhauling America's tax system. But what about the flat tax?
Movement doesn’t always equal progress, but Perry and his (now-expanded) political team are clearly hoping to use the next three debate-free weeks to re-write the prevailing “Perry is fading” narrative of the campaign.
That Perry has fallen from the lofty frontrunning heights of late August is indisputable.
In a Washington Post poll [ http://www.washingtonpost.com/wp-srv/politics/polls/postabcpoll_100211.html ] taken in early September — two weeks after Perry got into the race — he stood atop the field with 30 percent. By earlier this month, Perry’s support had been cut in half. Early state polling has shown a similar arc, as the initial excitement over Perry has worn off following a series of lackluster debate performances.
New Gingrich added his own optional alternative flat tax [ http://www.newt.org/solutions/jobs-economy ] to the mix. It has a 15% tax rate, compared with Perry’s 20%, and it would also exempt mortgage interest and charity (so isn’t really flat), although it wouldn’t allow a deduction for state and local taxes. Like Perry’s plan [ http://www.forbes.com/sites/leonardburman/2011/10/25/perry-optional-alternative-flat-tax-good-politics-delusional-policy/ ], it’s elective. High-income people will jump at the chance to pay a 15% rate rather than 35% and have all of their interest, dividends, capital gains, rents, royalties, etc. exempt from tax. Low-income people will stay with the old tax system. It’s not simple, not fair, and won’t come close to raising enough revenue to pay for the government, even if spending is slashed.
Even tax-averse Republicans should be terrified at the prospect of either of these plans becoming law. They would inevitably lead to a world-shaking financial crisis in the US, and ultimately much higher taxes and draconian cuts in spending. Pick your favorite basket case in Europe to see how this plays out, except that it would be much worse in the US since we’d bring the rest of the world economy crashing down with us.
This is really getting scary. Do GOP candidates really have to enter an alternate reality where deficits only matter if we’re talking about spending and where the big pressing problem is that millionaires and billionaires don’t get to keep enough of their money?
Seriously, our nation is facing enormous challenges, as big as any in my lifetime. We need two parties that will debate alternative paths to address those problems. Now is a really bad time to decide that reality is optional.
Len Burman is a professor at Syracuse U. and focuses on tax and budget policy.
Market Data 
Markets 
AI
