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Thursday, March 31, 2005

George Will is fooling you:

In an OpEd, The Tax Plan To Kill K Street, George Will argues that by embracing a consumption tax proposed by Rep. John Linder (R-GA), those bad ol' boys on K Street will be destroyed. Yup, that's Will, a tireless champion of the average citizen with a Republican proposal. Try another one, George.

But let's look at what he wrote. Get this line:
[Linder's] bill would abolish the Internal Revenue Service and the many billions of tax forms it sends out and receives. He would erase the federal income tax system -- personal and corporate income taxes, the regressive payroll tax and self-employment tax, capital gains, gift and estate taxes, the alternative minimum tax, and the earned-income tax credit -- and replace all that with a 23 percent national sales tax on personal consumption.
Out with gift and estate taxes. In with, well, with what? Nothing. No 'consumption' involved with gifts and estates, which is a big advantage for the rich.

The next sentence in the essay is: (emp add)
That would not only sensitize consumers to the cost of government with every purchase, it would destroy K Street.
"Sensitizing" people "to the cost of government" is the Lucky Ducky strategy. Get the lower income folks angry so that they call for a lowering of the 23% rate, and you are on the road to no taxation. No government services. A libertarian paradise.

Will continues: (emp add)
... his bill untaxes the poor by including an advance monthly rebate for every household equal to the sales tax on consumption of essential goods and services, as calculated by the government, up to the annually adjusted poverty level.
Is that "essential goods an services" as priced in New York City, or in Jackson, Mississippi?   If the Bush administration is any guide, it'll be the lower amount no matter where you live. (Not too long ago Bush proposed using a wider geographic area to determine average rents, which meant people in New York City would have gotten less housing support.)

But here's our main gripe with the essay. This assertion: (emp add)
Corporations do not pay payroll and income taxes and compliance costs; they collect them from consumers through prices.
They collect them, in part, through prices. Payroll and income taxes are not passed through 100% to the consumer. Due to market pressures (i.e. competition), corporations have a trade-off between their profit margin and how much they want to pass along costs. If they have to lower the profit margin, then they have paid those taxes.

Reducto ad absurdum per George Will:
  • Corporations don't pay taxes. They collect them from consumers.
  • Consumers don't pay those taxes. They collect them by demanding higher wages.
  • Corporations don't pay those taxes (embedded in the higher wages). They collect them from consumers.
  • Consumers don't pay those taxes. They collect them by demanding higher wages.
  • Etc.



4 comments

I'm all for trying to tackle the excess of DC lobbyists, but Will's assertion is laughable. A change in tax code will mess up the K Street lobbyists? Ha! Regulatory exemptions, government purchasing, federal project funding... that's the main course of DC lobbyists these days. This is an application of gauze without tape, falling off with the first movement.

And Will knows that.

By Blogger PSoTD, at 3/31/2005 7:02 AM  

"Make people sensitive to the cost of government"? Isn't that what Thatcher's Tories were trying to do with the poll tax?

You all know how that turned out.

By Blogger Sully, at 3/31/2005 9:36 AM  

Amazing what hogwash passes for serious solutions to comlex problems, these days. And somehow they always end up screwing the lower classes while posing as being good for them.

Here's my proposal, George. How's about we cut your income to $30,000 a year, on which you have to support your immediate family alone, then we implement your ideas, and the economic ideas of a number of other upper-income geniuses that have been bandied about the last few months. Let's let you live with the results for a few years, then you can come back and write an op-ed on how well it's worked out for you.

Yes, I think I'd like that just fine.

By Blogger Riggsveda, at 3/31/2005 1:38 PM  

Making laughable assertions and hogwash that supports the corporate agenda,isn't that what Will gets paid the big bucks for?

Seriously,his routine is to use incorrect facts and figures in his awkward and difficult to read writing style so the unwashed masses will believe that he is truly an intellectual.

You didn't think he was paid for his talent or his looks, did you?

By Blogger granny, at 3/31/2005 2:26 PM  

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