Tax Jujitsu: Why Democrats Should Propose a "People's Tax Cut"

[dajoki]

Tax Jujitsu: Why Democrats Should Propose a "People's Tax Cut"
by Robert Reich Former Secretary of Labor, Professor at Berkeley
Posted: August 24, 2010 04:15 PM
http://www.huffingtonpost.com/robert-reich/tax-jujitsu-why-democrats_b_693046.html

<snip>

Republicans understand the art of tax demagoguery: Put the other side on the defensive by forcing them to explain why a "tax increase" is warranted and they lose regardless.

So instead of playing defense, Democrats should go on the attack.

Accuse Republicans of being shills for the rich.

And don't stop there. Do tax jujitsu. In addition to ending the Bush tax cut for the rich, put forward another proposal for growing the economy that cuts taxes on lower-income Americans.

Democrats should propose eliminating payroll taxes on the first $20,000 of income, and making up the revenue loss by applying payroll taxes to incomes above $250,000.

This would give the economy an immediate boost by adding to the paychecks of just about every working American. 80 percent of Americans pay more in payroll taxes than they do in income taxes. And because lower-income people would get most of the benefit, it's likely to be spent.

It would also give employers an extra incentive to hire because they'd save on their share of the payroll tax. And most of the incentive would be directed toward hiring lower-income workers -- who have taken the biggest hit on jobs and pay during the recession.

It wouldn't add to the deficit. Lost revenues would be made up by applying payroll taxes to income exceeding $250,000. This is certainly fair. As it is now, the Social Security payroll tax doesn't apply to any income over $106,000. Having the tax kick in again at $250,000 would draw on the top 3 percent of earners, who (as noted) now rake in a larger portion of total income than they have in more than 80 years.

Call it the People's Tax Cut, and let Republicans explain why they're against it.

[SpiralHawk]

1. "We love it." - The American People

[SpiralHawk]

5. "We hate it." - RepubliConsters (R)

[JHB]

2. "Main Street Tax Cut", ...

...unless you're deliberately courting "commie" calls...

[denverbill]

3. Sorry, I don't think the DLC will allow that.

They don't care much for 'class warfare', since they are part of the class that would be getting 'warred' against.

[Poboy]

4. k&r

[alc]

6. I agree. I'm sick of hearing "Bush tax cuts"

Forget about letting the "bush cuts" expire or extending some or all of them. Put them in the past and come up with a plan that makes sense.

One tax change I'd love to see the conservatives response to: Index capital tax gains (for stocks) by the number of good pay/benefit US jobs a company creates or looses during the time you own the stock. Give a GREAT rate (5%) if they create a ton of jobs like conservatives claim. Give them a bad rate (90%) if they ship all jobs overseas.

Maybe that's a dumb idea, but come up with innovative ways to use tax as incentive and to let critics prove their assertions (e.g. good rate if you were right, bad rate if you were wrong.)

[dajoki]

8. Agreed n/t

[Hannah Bell]

7. "Democrats should go on the attack." +100