Republicans and Taxes (WSJ article)

[Chris_]

As the rugby scrum that is the Republican Presidential race heads to South Carolina, the players are wrestling on conservative turf. So it's a good time to wrestle ourselves with an issue that has become a conservative signature -- taxes.

The good news is that all of the GOP candidates want to make the Bush tax cuts permanent, and each is talking about some kind of new tax cut or reform. Rather than burying Reaganomics, as many in the media want to do, these candidates are trying to update it for our current economic challenges.

* * *
The latest bidder is Rudy Giuliani, who last week offered his plan to cut taxes by $6.3 trillion over 10 years. The former New York City mayor wants to cut the corporate income tax rate to 25% from 35%, bringing that rate close to the average of our major trading partners. Mr. Giuliani would chop the capital gains rate to 10% from 15%, and he'd allow capital gains to be indexed for inflation so investors no longer paid tax on phantom gains. He'd also index the Alternative Minimum Tax (AMT) for inflation, and on top of all this he wants to create a one-page, 11-line tax return that would eliminate most deductions and tax credits and install three lower rates of 10%, 15% and 30%.

Filers would have the option of choosing this "fast form" or the current code with its 13,000 pages of rules. Mr. Giuliani would retain the mortgage and charitable deductions on his alternative tax form, no doubt because he fears their political power. In this sense, his plan is inferior to Fred Thompson's optional flat tax (two rates: 10% and 25%), which is the simplest and best reform in the field. (See "Flat Tax Fred," Nov. 28.) But Mr. Giuliani's ideas are a big improvement that would boost the economy.

Messrs. Thompson and Giuliani are also the best in the field at explaining how taxes affect an economy. They understand incentives and aren't cowed by Democratic arguments that tax cuts favor only "the rich" and produce deficits. Asked at a recent debate whether tax cuts lead to an increase in tax revenue, Mr. Giuliani responded that some tax cuts do and some don't. He's exactly right: Tax credits and rebates, the latest fad, lack the bang for the buck that marginal rate cuts offer.


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http://online.wsj.com/article/SB120053079762196023.html?mod=opinion_main_commentaries

[Chris_]

Kyl slams Democrats on economy

Yes, the Democrats are planning another "economic stimulus" package.  That is, they will be stimulating more government spending while putting the country's economy into the dumper.

Mr. Kyl said Senate Republicans are bracing for clashes as soon as the session convenes next week with debates on how to boost the economy and plans to update the Foreign Intelligence Surveillance Act (FISA), rules for government wiretaps that expire Feb. 1.

As for the Senate fight he foresees over efforts to spur the economy, Mr. Kyl said President Bush should steadfastly oppose measures that lead to higher taxes or that increase government spending, both chief ingredients of economic-stimulus proposals favored by the Democrat-led Congress.

Mr. Kyl's comments came as Republican and Democratic leaders in the House, which is back in session this week, have dropped the fiery partisan rhetoric that last year stifled the Democrat-led Congress and have promised to work together on a quick fix to jump-start the nation's sluggish economy.

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http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080117/NATION/141598173/1001

[Hawkgirl]

I don't like Fred Thompsons idea of a tax cut. 
His plan is if you're income is less than 50G's, you pay 10%, more than 50G's, 25%.  Why should I or any other person who makes more than 50G's per year pay more taxes than someone who makes less?  Another version of distribution of wealth.

[Chris_]

That's the way the current tax code is set up.  Thompson's plan just cuts the top rate from 35% down to 25%.

[Hawkgirl]

Maybe Rudy's will be better..although I don't know if he announced his criteria. Anyone who makes six figures is screwed.  So you either have to be just getting by or filthy rich, if you're in between, you pay most of the taxes.

[Chris_]

I like his idea of the health insurance tax credit, but I haven't heard any details. 

[Crazy Horse]

Maybe Rudy's will be better..although I don't know if he announced his criteria. Anyone who makes six figures is screwed.  So you either have to be just getting by or filthy rich, if you're in between, you pay most of the taxes.

35% now...........25% with his, I'm lost, I see a 10% savings regardless

[Hawkgirl]

Maybe Rudy's will be better..although I don't know if he announced his criteria. Anyone who makes six figures is screwed.  So you either have to be just getting by or filthy rich, if you're in between, you pay most of the taxes.

35% now...........25% with his, I'm lost, I see a 10% savings regardless

Do you know which income is in the 35% tax bracket?  TOP end.
Taxable income Base tax

Married filing jointly or                     Single

$ 15,650  15%                    $ 7,825     15%
$ 63,700  25%                       $ 31,850    25%
$128,500  28%                       $ 77,100    28%
$195,850  33%                    $160,850   33%
$349,700  35%                       $349,700 and above  35%

As I said, the filthy rich or the utterly poor get the best tax relief with the current system....While Fred's may be a bit better....it doesn't change the fact that the upper middleclass end up paying the majority of the taxes.