Death and Taxes

Re: Republican Alienation - Eric, The Daily Dish

There's an interesting debate going on between the guest bloggers (a liberal and a supply-side conservative) over the issue of taxation in the current political climate. While Eric (the liberal) is making a point concerning the Republican Party's illogical approach to taxation and deficit spending, Bruce Bartlett is arguing that most of the Republican Party no longer understands what low taxation looks like. It may seems as if the two agree but they differ seriously over the solution to the problem. Eric is concerned that whoever is in charge when the coming budget crisis hits will raise tax rates far beyond necessary and naturally wipe out any federal gains made through tax cuts. Bartlett fears the rise of the 'fair tax' people within the Republican Party as he views a national sales tax as seriously misguided and damaging. Instead, Bartlett offers the idea of a value-added tax (or VAT) in addition to a national income tax. Naturally, he argues that both taxes would need to remain low but he does make a persuasive (although I'm not entirely convinced) argument for the VAT. I would like to see lower income taxes for the middle class and I think simplifying corporate taxes and tax breaks would settle the revenue short fall. My biggest concern is that the shape of a VAT bill would not emerge as beneficial to the majority of Americans while still not solving the budget crisis. As Bartlett says, most of such talk right now is purely theoretical but I worry that such an ivory-tower attitude will not result in a feasible tax system when the budget crisis does hit. Still, the whole argument is quite fascinating.