Tuesday 14 April 2009

Fair Tax, Indeed

Keeping in mind the different American meaning of "the middle class", Right Democrat has this:

Many Republicans continue to advocate a national sales tax a/k/a "The Fair Tax" which would place a greater tax burden on the middle class while having a minimal impact on the wealthy and big corporations getting a free ride. There is no question that our tax code has grown absurdly complex but the "Fair Tax" simply isn't a viable solution for a number of reasons.

A much better idea is a middle class flat tax with progressive taxation retained for upper income groups. This pro-middle class tax reform proposal was suggested a couple of years ago by Former Congressman and Democratic Leadership Council Chairman Harold Ford.

Harold Ford made the case for a middle class flat tax in a Washington Times column published on November 29,2007.

Ford wrote:

"This is simple and fair: no middle-class family with an income of under $150,000 should ever pay an effective tax rate of more than 10 percent. If what they owe after calculating their taxes is more than 10 percent of their income, they won't have to pay a dime above 10 percent. If they owe less than 10 percent, they pay the lesser amount.

We ended the last century with America's economic might at its zenith, with Americans at their most optimistic, and with nearly all who endeavored to make the most of their opportunities and talents getting ahead in life. John F. Kennedy's declaration that a rising tide will lift all boats was alive and well.

Middle-class Americans generate little or no national savings. We've had four straight years of rising productivity and falling incomes. Many Americans are earning less, while the costs of a middle-class life have soared: In the last five years, college costs are up 50 percent, health care up 73 percent, and gasoline more than 100 percent. Rising housing costs have driven people farther and farther from their work.

These trends undermine our way of life because middle-class strength and growth represent the backbone of American life.

Our national political discussion about how to grow the middle class often becomes just that, a political discussion punctuated by harsh talk of "class warfare." In fact, class warfare is under way — as billionaire Warren Buffet is fond of saying — and the middle is not winning.

To address the challenges of the middle class, Democrats should advance an agenda that aims to do something loftier than just repeal the Bush tax cuts on millionaires. It should boost incentives for average Americans to increase savings and investments, and help them participate more fully in the upside of economic growth."

We need tax policies that will help working families instead of more tax cuts for the rich. Harold Ford has given Democrats a winning issue with the middle class flat tax. Some Democratic members of Congress need to take this idea and run with it.

Indeed so.

But in fact, both in the United States and in the United Kingdom, all income below national median earnings for full-time work should be tax-free, with a flat rate of income tax thereafter, with no exemptions whatever beyond that poersonal alloance of national medain earnings, and with a unified system called and delivering Social Security in the form of a universal income of half national median earnings.

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