Let's talk taxes (policy that is)

[Clarkie1]

It is after all, getting to be that time of year.

General Wesley Clark has proposed that a family of four with income of $50,000 or less owe no federal income taxes (they currently owe $1,500). To make up for this, families with over a million dollars in annual income would pay 5% more than currently on the amount over a million. Only .1% of American families have annual income over a million. (Those rich families received an average tax-cut of $128,000 from the Bush tax-cuts) Paul Krugman, NY Times columnist and MIT Economics professor described Clark's tax plan on CNBC's "Special Report with Maria Bartiromo," January 26, 2004:

Clark's is actually the most imaginative. What we've been seeing over the past--really, past 20-plus years is a steady loss of the progressivity of the tax system, a steady loss of the system where we--where we--you know, people with high incomes pay a higher share of their income in taxes. Clark's is a serious tax reform effort and attempt to restore some of that progressivity. Major points for imagination.

http://www.moveleft.com/moveleft_essay_2004_02_08_tax_proposals_edwards_kucincich_clark_kerry.asp

I also like some of the ideas in Edward's and Kucinich's 2004 tax plans.

[Warpy]

1. I'm for any restoration of a progressive tax code

along with recirculating money starting with the bottom. That kind of thinking ushered in a sustained boom for everybody but the rich, the growth and maintenance of a strong and stable middle class, and a culture that was by most measurements civilized and humane, although civil rights for blacks and women desperately needed to be addressed.

My only quibbles with Clark are that he doesn't seem to address single people and he doesn't make it progressive enough. Anything over a million a year should be taxed at a confiscatory level, so that one's income once that has been reached just becomes a "mine's bigger than yours" numbers game. Nobody's worth that kind of money, not ever.

The reason the progressive tax ran into trouble was that it was tied to specific dollar amounts. That meant that as inflation progressed, people found the percentage they paid in tax going up while their purchasing power stayed the same or declined. The 70s inflation pretty much killed the middle class.

Any progressive tax needs to be tied to the median wage with a provision for assessing it every three months in periods of rapid inflation or deflation, and every two years during stable periods.

Of course, all this is academic, now, since the first thing the moneyed classes do when they amass most of the wealth in any democracy is destroy democracy.