Monday, August 02, 2004

Here we go again with the flat tax being floated as a viable alternative to the current Byzantine system. Then Steve Forbes, now Denny Hastert.

While there are actually a few things I do like about the flat tax, in the end I must conclude that it has an absolute zero shot of ever getting passed and that said, it then simply becomes an empty symbol used to win over less-realistic (and less-informed) voters.

Look, the fact is before the flat tax has even a smidgen of a chance of ever seeing the light of day in Congress, the first thing that must be overhauled is the degree to which money buys influence in our political system. The special interests & lobbyists have so much power in DC, and so much at stake in the current loophole-heavy tax system, that they will pull out all the stops to keep things as they are. One of many examples for why they will resist change: more than 60% of all U.S. companies paid no federal tax at all during the boom years of 1996 to 2000, the GAO recently reported.

And make no mistake, Hastert is absolutely aware of this fact. He realizes this is a no-brainer issue to lob at the Republican base -- and the best kind too. On the one hand, they can trot out examples of high-earning liberal millionaires who pay near zero in taxes under the current system, thus throwing red meat to their ravenous devotees. At the same time, they can divert attention away from their ultra-rich-favoring tax breaks and the resulting deficit, and they can cast a knowing "wink-wink" to their special interest backers, with both assured that the status quo will remain.

C'mon people, we have to wake up & see through this stuff. It's once again their favorite tactic: they want to divert your attention to the left hand, while the right hand does something very different.

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