Last Updated:November 28 @ 07:44 am

Rasmussen: Tax Reform Works for Voters, Not for Political Class

By Scott Rasmussen

Tax reform with lower rates and fewer loopholes would be good for America and popular with voters. But substantive reform won't come any time soon.

To understand why, it's helpful to remember that America's political heritage did not begin in 1776 but on the streets of London in the 16th to 18th centuries. Those were the formative years for the political ideas embraced by our Founding Fathers. Like America today, those years in London saw a high level of tension between the general public and the elites.

Robert O. Bucholz and Joseph P. Ward describe a curious reality about how that played out in their book, "London: A Social and Cultural History, 1550-1750." During those years, more and more crimes were made punishable by death, including housebreaking, shoplifting and pickpocketing. Yet while the list of capital crimes grew longer, there was a steady decline year after year in the number of people actually put to death.

This was a system that allowed the government to terrorize citizens into compliance with draconian laws while allowing the king and his court to appear merciful when those convicted were allowed to live. That's the underlying logic that guides political opposition to tax reform in this country.

Among the public, there is strong support for reform, and it is quite possible to craft a politically popular solution. Eighty percent say it's important to replace the existing tax code with something simpler. The idea of lower rates and fewer deductions is very popular. Still, when you get into the details, it's tough to take away deductions that benefit the middle class, like the home mortgage interest deduction.

One way to address this is to leave all the current deductions in place for lower- and middle-income Americans. Then phase out deductions for those who make more than $250,000 a year and completely eliminate them for those who make more than $400,000 annually. This approach is supported by 52 percent of voters and opposed by 30 percent. Those with higher incomes are more evenly divided.

At the other end of the income scale, 68 percent of voters think that the first $20,000 of income earned by everyone should be tax-free. Despite Republican grumbling about it during Election 2012, this concept should be part of any reform designed to win public support.

When it comes to tax rates, there is little or no support for a so-called flat tax. But there is a lot of support for something with just a few rates: perhaps 10 percent on the first $50,000 of income, 15 percent on income up to $250,000 and 20 percent above that. If the numbers worked out to be revenue neutral, voters would love it.

America's politicians and financial elites would hate it, however. Like the kings of England long ago, they benefit from a system with high rates and lots of deductions. They can assert a right to tax everyone heavily while displaying mercy with the gift of deductions. The ability to control deductions allows politicians to direct money into politically approved areas of the economy or to help the politically well connected. As an added bonus, political leaders can extort donations from industries that want a little help from the government.

That's the challenge. Tax reform works for America but not for the Political Class.




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  1. sumitchComment by sumitch
    December 29, 2012 @ 7:19 am

    What we need is politician reform. We need it much more than tax reform. All more taxes do is give the politicians more money to use to as ammunition for bribes for more votes. The “bridge to nowhere” is a perfect example. It was political payback pure and simple. His mistake was losing control, getting mad and being seen pitching a fit on TV. Only then did he lose his office. If he had kept his mouth shut he would still be there, everything else being equal.

    We vote to be represented in DC based not only on what they say but how they look and how they sound. It’s an act in most cases. When they get there and join “The Club” the only thing they’re interested in is staying in the club.

    Every election cycle we hear the same high sounding lies. First timers need to be asked how they intend to accomplish what they promise. I suspect that 50% would have no idea. With incumbents we should remember what they promised us to get the office in the first place and hold them accountable. We should ask them why they didn’t produce and reject their standard excuse of blaming someone or something else.
    to keep the office.

    The old rag that we can vote them out of office if we don’t like them is just pure bull. If they are supported by their party, they’re bullet proof. All they need to get party support is to do as they are told by the party. We need an end to superpacs, maybe even pac donations totally. We need term limits. We need accountability. But we’re not going to get them because rule number one is to do as told by the party and rule number two is to repeat the same bull that got them into office in the first place over and over.

    Currently they are hunting some way to get rid of “entitlements”. They are saying it’s not fair for our children and grandchildren. What about fairness to us? We’ve paid for what we were promised all our lives but when it comes time to collect they act like they are doing us a favor. What they are really doing is bribing future voters at our expense. We’re not the reason the money isn’t there, they are. They took it to buy more votes. They robbed the piggy bank.

    They are saying the system is broken. You bet it’s broken and they are the ones that broke it.

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    • RattlerjakeComment by rattlerjake
      December 29, 2012 @ 10:30 am

      All of your points are right on, but in addition we need reform in how our government spends. Our Constitution is quite clear that taxation is only to fund the running of our government and for our security. NOT to give to the other 125+ countries because they can’t take care of themselves, NOT to invest, NOT to provide insurance for anyone or anything, NOT to run education, NOT to provide banking, mortgages or loans, NOT to pay out money in reparations for mistakes made by previous generations, and definitely NOT to redistribute wealth. Presently we tax income, property, and profit, but millions in this country are making a living with undocumented income “under the table” or “on the side” without paying their fair share and receiving entitlements because they show no income. A fairtax or flat tax as well as political reform are the only solutions to taxation. Taxing spending forces EVERYONE, whether legal or illegal citizens, rich or poor, or visitors the same percentage based on what and how much they by. As well politicians would NOT receive salaries but be paid as the founding fathers dictated and would have NO say in what their payments would be.

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  2. JDZComment by JDZ
    December 29, 2012 @ 12:13 pm

    It has gotten totally out of control “of the people…by the people”…as our Constitution has clearly stated it is designed to be implemented. The federal government and down to the states and lower have mutated into self perpetuating forms of political “royalty” that now baically control our lives. Our individual freedoms and basic rights have been methodically and incrementally undermined by the political class in the country. Thousands of government departments and commensurate laws and regulations have been developed and implemented from local levels up to the federal government and back down which are all designed to take both earnings and freedom away from the American people.

    This is the typical evolution of government with the aid of self serving politicians. The politicians in our government have, over the years, created a unique a form of royalty for themselves that is self perpetuating. Anyone who is lucky enough to be elected into Congress can live the good life at taxpayer expense if they just “play the game” and go along with the career politicians that control the federal government. Their special perks, salaries and benefits, etc. exceed anything close to what average hardworking Americans can come close to expecting any time in their lifetime. This is not what the Founders of our government intended, quite to the contrary, but has developed slowly in basically a bipartisan manner, particularly over the last 60 years.

    These politicians have finally managed to increase government bureacracy and intrusion to levels where they are failing the American people more then they are helping us. They have facilitated massive growth in government bureaucracy and cost far beyond any reasonable level of affordability and sustainability by creating massive public expected government provided entitlements.

    Barack Obama is the poster politician of the century who has demonstrated he is a master at manipulation of the system to his and his political crony’s advantage. He ignores the Constitution and basically does whatever he wants and goes after anyone standing in his way. It is corrupt “Chicago” style politics at its best, and the “Low Informed Voters” (some call moronic voters) have enabled this to continue by voting Obama to a second term.

    This country is on a suicidal path to a financially driven economic collapse that will exceed the “Great Depression” in it’s impact to the American public which will create massive chaos within the country which we have never experienced at the national level in this country. It remains to be seen how the various levels of government and the American people at large will react to this unfortunate collapse of our economy and exceptional way of life.

    If the socialistic driven Democratic party is in control of the federal government when it all hits the fan, it is likely that the USA will be finally transformed into the communal socialist model of the radical communist element within our country. Say goodbye to the America that was the envy of the world.

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  3. rzraickComment by rzraick
    December 29, 2012 @ 11:57 pm

    Does anyone care that all these taxes are illegal in the first place? Why squabble over what tax laws should do and should not do? The simple truth is that income tax accross the board is a fraud, and illegal.

    The Federal Reserve was passed into existence using fraud. Once created they knew that they would poartner with the government to loot the wealth of the country and the progressive income tax was their insurance that they would profit from this fraud.

    In addition the ammendment which is used to justify the income tax was never properly ratified. That was just another fraud. And even if it had been ratified, it granted no new taxing power.

    A progressive income tax is illegal. Thr government is a bunch of criminals and traitors. Until we decide to do something about that, all the rest is meaningless.

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