Monday, November 08, 2004

Let the tax overhaul spin-war begin!

This article from the NYTimes is the opening salvo in what's probably going to be a huge issue in the next four years - dubya's determination to scrap our current tax system. Everyone's favorite political winner Karl Rove was on a couple of the Sunday morning talk shows, saying "How can we encourage a dynamic, growing economy and do so in a fair way that requires a minimum amount of paperwork and compliance costs?"

Naturally, the Dems don't want to be painted as the defenders of the IRS, so they must come up with reform plans of their own. The best path is to try to close up some of the billions of loopholes, but maintain a progressive income tax. Any of this 'flat tax' or 'national sales tax' garbage needs to be stopped immediately. There is no way that the poor can posssibly afford to keep our federal deficit from spilleth over.

And don't think other countries aren't paying any attention, I pointed out yesterday, China is selling off plenty of U.S. currency, a move which can be interpreted as speculation that the U.S. won't be able to cover its debts...

Update: Here's a transcript of testimony taken last month before the Committee on the Budget, from William Gale of the Brookings Institute.

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