Collins to work toward increasing visitation to Arkansas by groups and promoting the state's appeal
The call for lower taxes has been the holy talisman that guided Republican presidential candidates to victory for 32 years, or at least that was the popular wisdom. There were exactly three of them — Ronald Reagan and the two Bushes — although the first Bush failed at re-election after reneging on his promise ("Read my lips: no new taxes!" he said, before restoring a few of the taxes on the wealthy that Reagan had cut).
So all five major Republican candidates now promise to cut taxes dramatically — or try to — if they are elected, and four of them have offered a few details of their tax plans, which seems to be required of Republicans this time.
But you have to wonder whether this is a year that tax cuts will hold so much charm with voters, though clearly they are still magic with the Republican base. The polls show something much different from 1980, 2000 or any other election year in memory. A big majority of Americans are concerned about growing income inequality and government favor for the rich, and they understand that lower taxes do directly affect federal budget deficits, which Republican orthodoxy for 30 years has denied.
The tax plans of all five candidates heavily favor the wealthiest Americans and the fattest corporations, and four of the five — all but Congressman Ron Paul's — would add from $6.6 trillion (Mitt Romney's) to $18 trillion (Newt Gingrich's) to the national debt over the next 10 years. No one can forecast what Paul's plan would do because he would try to take the country back to 1913 and eliminate federal income taxes. But he implies that he also would eliminate all the intervening federal programs, from Medicare to overseas defense, to restore federal spending to comparable 1913 levels.
It has been fairly easy at least since the late 1990s to assign the relative benefits of any tax plan to income classes. You can do it in the comfort of your home. The Treasury Department posts detailed figures annually online on income and tax liabilities by broad income categories in each state.
As it happens, the Institute on Taxation and Economic Policy ran the figures on what the tax plans outlined by Romney, Gingrich, Rick Santorum and Rick Perry would do in each state.
Let's take Arkansas, which has one of the lowest per-capita incomes in the nation.
Perry and Gingrich say they would scrap the progressive tax system and impose one flat rate, Perry of 20 percent and Gingrich of 15 percent. Most investment income — capital gains, stock dividends, and interest — would not be taxed at all. So many of the richest Americans would pay zero income taxes. Millions of people with low incomes might owe more, not less, but they would be allowed to choose whether to file under the current system or the new one. Presumably, they would file under the current system as long as they were allowed.
Under Gingrich's plan, the top 1 percent of Arkansas taxpayers would get an average tax cut of $227,510 a year and the middle 20 percent of taxpayers would realize an average gain, at least for those who could claim it, of $1,540 a year. Under Perry's, the richest 1 percent would get only $164,600 each and the middle 20 percent $550.
Santorum has not fleshed out his plan sufficiently, but the analysts made a few assumptions based on his promise to reduce brackets to only two and cut the top rate to Reagan's last top rate, 28 percent. The top 1 percent would realize a cut of $134,890 a year, the middle 20 percent $1,770.
Romney would adjust brackets and rates so that the top marginal rate on the highest incomes fell from 35 percent to 25 percent. The richest 1 percent of Arkansans would get back $134,890 on average and the middle 20 percent of taxpayers $1,770 a year.
As for the deficits the tax cuts would create, the orthodoxy continues to be that lower taxes on the job creators — businesses and the investor class — will produce growth and jobs and even greater, not fewer tax receipts, although there is no instance in history of their having done so. Big tax cuts have produced higher deficits every time (1981, 2001, and yes, 2009 under Barack Obama); tax increases have led to smaller deficits or surpluses every time (1983, 1986 when full capital gains taxation was restored, 1990 and 1993). That's the factual record.
High-bracket tax cuts have contributed to the growing income disparity. Crying "class warfare" when it is pointed out may not get it done this year, but that is only a guess.
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