Letter to the Editor

Flat tax proposal just another Republican swindle

Thursday, November 3, 2011

To the Editor:

Recently Cain and Perry have proposed "flat" taxes to replace our current federal tax system. They argue that it is only fair that everyone pay the same tax rate.

Democrats reply that it is fairer for the wealthy to pay a higher rate both because they can afford a higher rate and because they benefit more from government spending. True as that is, with that reply the Democrats play right into Republican hands.

Why? Because by arguing about whether flat rates are fair ignores the fact that Republican "flat" tax proposals aren't flat at all. They are giveaways to the rich.

Republicans want you to believe that everyone would be paying the same rate, but what they don't tell you is that they don't count capital gains income (and in Perry's case dividend income too) as income. Capital gains are exempt from the tax. The wealthy often get much of their income from capital gains.

One study showed that under Herman Cain's 9-9-9 plan billionaire Warren Buffet's income tax rate would effectively fall to 1.1 percent, and after his charitable deductions are taken into account he would pay absolutely nothing. Another study showed that under the Cain plan the bottom 80 percent in income would see their federal taxes go up, but that the top 20 percent would see their federal taxes go drastically down. The flat tax has nothing to do with fairness; it's just a con game meant to reduce taxes on the wealthy.

But flat tax proposals are also moral obscenities. There is very little actual work associated with capital gains (and dividend) income. In fact, it is sometimes referred to as unearned income. If you are fortunate enough to have some money to invest you don't have to put a lot of time or effort into picking an investment. In fact, you can hire a financial consultant and put no effort whatsoever into the process. And if the financial consultant is good, the money will regularly roll in without you having to sweat a drop.

Thus, what Republicans are advocating is the income that is least earned, and made with the least effort on the part of "earner" is the very income that should be tax-free. The depravity of the people touting such plans as "fair" is incredible.

Oh, I know, once you call them out on this they'll say that capital gains should be treated differently because you have to provide an incentive for the wealthy to invest in the economy. That's how you create jobs.

Hogwash. According to them greed is good. The wealthy aren't going to keep their disposable income in a mattress. They're going to do everything they can to leverage it into more money. They need no incentives to invest their money.

In conclusion, even in hard times Republican shills working for the wealthy are trying to swindle the average Joe with their flat tax proposals.

Bruce Sanders