Rand Paul’s “fair and flat tax” is neither fair nor flat

Over the last several decades, there has been a clear trend in how each of America’s political parties handles budgets and, by extension, deficits.

The trend began with Ronald Reagan, who more than doubled the deficit. This new normal of deficit spending was continued by George H.W. Bush, who left Clinton with a $200 billion deficit. However, Clinton took that deficit and turned it into a surplus for his last 4 fiscal years, the longest running surplus since the “roaring 20s.” George W. Bush somehow turned that surplus into a 1.4 trillion dollar deficit, the largest in United States history. Since taking office in 2009, President Obama has cut that deficit by about 70 percent.

The message is clear: There is a fiscally responsible party, and it is not the Republicans.

Which is why it was unsurprising to see Rand Paul unveil a tax plan last week that would continue the proud tradition of his ideological forebears in sinking us deeper into deficit and, through it, debt.

The tax system, which he calls “The Fair and Flat Tax,” an amalgamation of “flat tax” and “fair tax” proposals beloved by the Tea Party, is laid out in his op-ed for The Wall-Street Journal:

I am announcing an over $2 trillion tax cut that would repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses.

By his own admission, this would decrease revenue by $200 billion per year, a nearly 50% increase on Obama’s current deficits. To avoid this, Rand says that he would cut as-yet unspecified spending programs.

To Rand’s credit, some of these cuts could come from the military. His budget proposal in 2013 included about an 11% cut to military spending: from a projected $588 billion in 2014 to $521 billion after that. Of course, that wouldn’t be anywhere near enough to pay for his tax plan, and Rand didn’t have to impress GOP primary voters at that time, so if he intends to make the math work to get his tax plan to revenue neutrality, he’s certainly going to have to go after lots of domestic programs. Past legislative campaigns against the Department of Education, Medicaid and food stamps, which Rand Paul has not-to-subtlely called “slavery.”

Rand Paul, via Creative Commons

Rand Paul, via Creative Commons

Food stamps are a cornerstone of the American social safety net, and produce remarkably efficient economic multipliers. Every five dollars of money spent by the government on food stamps creates up to nine dollars in economic activity. It pulls up to 4 million people out of poverty per year. Food stamp programs have demonstrably reduced the risk of low income children getting hypertension, obesity, and diabetes by as much as 68%. Far from being the seeds of dependency, the program reduces food insecurity and allows beneficiaries to focus on getting a job instead of where they’ll get their next meal. The result is that well over half of families are working within a month of receiving food stamps and over 80% are employed in the year following receiving food stamps. What’s more, many families who receive food stamps already have a job, but are kept in need of food assistance by a too-low minimum wage, a byproduct of our corporate welfare apparatus that Rand Paul opposes raising. Rand believes that minimum wage jobs are for children, and doesn’t seem to have a clear path forward for these families who depend on it once he cuts their ability to get food and reduces their pay.

Ignoring and at times flatly denying these facts, Senator Paul claims that his tax cuts for businesses and the wealthy will trickle down. He also says that “the left will argue that the plan is a tax cut for the wealthy. But most of the loopholes in the tax code were designed by the rich and politically connected.” That’s a good line, but it doesn’t say anything about whether his plan will have net positive or negative effects on the wealthy’s tax rates. And the data don’t back him up: While it’s true that loopholes are written for and exploited by wealthier interests, it’s also true that Paul’s plan would feature businesses paying an average of 5 percent less than businesses are paying under the current system, even once every tax loophole is closed.

Senator Paul will argue on the trail that these tax cuts will help businesses hire more workers. This assumes that businesses hire based on something other than need. The motivation of a business is to maximize profit; taxes affect how much profit businesses get to distribute amongst their shareholders keep, but not how much is generated, which is why there is no correlation between tax cuts and job creation.

What stimulates job creation is increasing demand. More demand creates a greater need for more goods, which creates a need for more jobs in order to raise a corporate profit margin. The only way to raise demand is to raise the buying power of the people. Money in the pockets of the people, not corporations, drives economic growth.

A flat tax is intrinsically regressive. The more you have, the less likely a flat tax is to bite into the money you need for your necessities. Rand’s plan would decrease revenue just for the sake of being able to cut taxes for the wealthy and for corporations, and he intends to make up for it with bad economics, bad math and a spending policy that would devastate some of our most important economic stimuli. It would leave millions of people in poverty and millions of children in greater need of health programs.

Which, of course, he would repeal.

Slight inaccuracy in original article has now been corrected

Max Mills is a 26 year old Texan with a degree in Computer Science. Although he writes about a variety of things, his main focuses are education and political accountability. You can follow him on Twitter at @MaxFMills

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127 Responses to “Rand Paul’s “fair and flat tax” is neither fair nor flat”

  1. Karl says:

    Alright Max. Here’s the facts. I’m sure that if you had done your research you might not have posted such an inane article littered with drivel and personal loathing for the Republican party. Obviously facts are not your forte. I reference Treasury Direct (see how I actually reference my information) Debt as of 12/28/2007. Debt held by the Public 5,120,892,177,343.93 Intragovernmental debt 3,999,657,505,131.69 Total Public Debt Outstanding 9,120,549,682,475.62. Now let’s look at where we stand today with that great deficit reduction you are touting. Current as of 07/24/2015. Debt Held by the Public 13,099,949,355,959.15. Intragovernmental Holdings 5,051,943,898,806.04. Total Public Debt Outstanding 18,151,893,254,765.19. Now let me help you there.

    Current Total Debt 18,151,893,254,765.19

    Debt Under Bush 9,120,549,682,475.62

    Do the MATH
    Now this is actual numbers, not the fabricated numbers offered by the parties in power.

  2. Roman Richardson says:

    I thought we were finally over the myth of the Clinton surplus. It never happened. During Clinton’s term public debt did drop, which is where this idea of the surplus comes from, but intragovernmental holdings grew by an even larger number. Let’s make this dead simple and erase this surplus idea forever…

    While Clinton was in office the Gross National Debt (public debt + intragovernmental holdings) increased every year just like it always does regardless of who’s in office.

    So there ya go. End of story. No surplus. Can we stop pushing this nonsense, please?

  3. Terence Conklin says:

    I agree. The tit for tat serves no purpose. The article has biases that any intelligent person can see. Both Parties do it and both should stop it. We need a fresh sort of politics and that starts with people thinking for themselves.

  4. Terence Conklin says:

    No, you’re ignorant because you’re ignorant. That may be hereditary or choice.

  5. Terence Conklin says:

    There is plenty factually wrong with he article. Besides what I noted elsewhere, Clinton had a huge surplus thanks to the dot com bubble, not his skill set.

  6. Terence Conklin says:

    For starters, he asserts that Paul would: “decrease revenue by $200 billion per year, a nearly 50% increase on Obama’s current deficits.” In fact decreasing the revenue only increases the deficit IF we continue spending a insane levels. Slashing the IRS budget is contrary to that insanity and cutting the Military budget is as well. However, outside of the “Military” budget is the huge amount spent (i.e. given to arms manufacturers) to wage wars in…I’ve lost count but it is a great many countries around the world. Those drones,cruise missiles, and operations are expensive to our budget and more importantly, our reputation.

  7. jlfliberty says:

    Point taken and deserved. Frustration over comes me at times, obviously too often.

  8. Moderator4 says:

    jlfliberty, you need to discontinue the ad hominem attacks in your posts. You are welcome to disagree, but cease the insults.
    This is your first warning.

  9. jlfliberty says:

    Read buddy READ… I (never) called people stupid for agreeing with the article. Sir, you live in the same dream world that all ideologues live in. Johnathan Gruber at least was honest when he referred to his parties supporters as the stupid voters. It also would apply to the other major party ideologues. Your own guy said it, spin it any way you like, he called his own supporters the stupid voters and that (obviously) includes you. Spin “IS” your reality and I do not debate those that cannot comprehend reality. In truth, why would I waste my time? Think about it, as long as you ignore these exchanges and the reality of what you have (imagined) between your ears, you will pass away one day stupid along with many that live in your world of fantasy.

  10. Max Mills says:

    I’m ignorant because you’re calling people stupid for agreeing with an article when you haven’t researched the topic and don’t know how accurate it is? I notice you didn’t respond to my rebuttal of your debt point.

  11. jlfliberty says:

    I (never) said that it was wrong, you completely missed the point. Is your reading comprehension challenged? Once I have a chance to check into this further I will not bother with responding to a simpleton ideologue that also lacks the depth of intelligence to comprehend what he reads. Keep looking at your avatar and worshiping your blissful ignorance and lack of reading comprehension.

  12. Max Mills says:

    So you haven’t researched it but you know the article is wrong? Strange viewpoint.

    Obama cut the deficit by 2/3rds. Debt is accumulated deficit. The reason the deficit is so high is because of what Bush did to the deficit. The only way Obama could have prevented the debt increases would be by either reducing the deficit by 1.4 trillion in his first year or 2.8 trillion in his second or 5.6 trillion in his third year etc etc. This is basic math. It would have been impossible even if he didn’t have a decidedly obstructionist Congress. Blaming the debt on Obama is ignorant.

    Here as elsewhere reality has a liberal bias. This ‘same thing both sides’ BS is just Republican propaganda at this point, at least in effect. The sides are not equal.

  13. jlfliberty says:

    No, I have not had the opportunity to research it as of yet. I will and I probably will find there is much more to it. Have you found this article to be comprehensive and include all of the facts in order to make a decision? Would you trust an article to give all relevant facts that in it’s second paragraph states (“George W. Bush somehow turned that surplus into a 1.4 trillion dollar deficit, the largest in United States history. Since taking office in 2009, President Obama has cut that deficit by about 70 percent. The message is clear: There is a fiscally responsible party, and it is not the Republicans.”) and fails to mention the debt incurred by this current administration who’s party they obviously support? I’m not that F’n stupid. If you believe and worship a particular party or cannot see (any small bias in that statement) then you are speaking to the wrong guy, do not waste my time. I prefer people of integrity and intelligence, not simple minded ideologues who do not see propaganda when it is this obvious. Geez….

  14. Max Mills says:

    So you can’t find anything factually wrong in the article?

  15. jlfliberty says:

    It’s like a stupid ideologue emotionally told me today, The other party did this to this group of people. I questioned how it could be unless government controlled loans. I looked into it and yes the party that he spoke of did it, but there was much more to the story and many more other taxes that his group was trying to do in that same legislation. Once I reseached even further I was correct in my assumtion and statement to them that, Yes the Government did control the loans which gave them the power and prevented the individual from exercising their freedoms. This person is an ideologue that runs around calling other people ideologues and reads drivel like this article that I commented on a daily bases. I am not sure about Rand Pauls proposal and have to do more research on it. I can tell you that reading this article and the obvious bias in the way he was discussed is enough that anyone with a smidgen of intelligence would know to go elsewhere for ALL of the facts. Ideologues are FOOLS, all ideologues, any party, anyone that would defend the integrity of this article as any form of true journalism.

  16. perljammer says:

    The “marginal taxation feature” you mentioned isn’t implemented in the current tax code quite the way you’ve described (at least, not for households earning less than $100,00/year) because the tax tables apply the same tax amount in dollars to an income range $50 wide.

    Here’s an example of the boundary condition, courtesy of the tax tables in the IRS Instructions for Form 1040 for 2014, for a person filing “Single”.

    If your income is 50,999, your tax is 8,600. Net income, 42,399

    If your income is 51,012, your tax is 8.613. Net income, 42,399

    Not a big bite, but a bite; most people making around $50k/year would probably rather keep the $13 than have it taken. But really, not much in the way of egregious injustice. Of course, the disparity rapidly disappears as income rises above the boundary.

    The tax tables stop at “less than $100,000”; after than, you use a formula where the tax rate varies with income. It used to be that your tax was a fixed amount, plus the marginal rage times the amount over a threshold. Not anymore; now, its just the rate applied to your entire income, less a “subtraction amount”, where the tax rate and subtraction amount varies progressively with adjusted gross income. However, the IRS seems to have figured it out pretty well and eliminated the boundary condition that exists in the tax tables.

    If your income is 186,350, the tax rate is 28% and your tax is 45,353,75. Net income, 140,996.25
    If your income is 186,351, the tax rate is 33% and your tax is 45,354.08. Net income, 140,996.92. So you get to keep 67 cents of that extra dollar you earned.

    As in so many other areas, it’s advantageous to make a lot of money.

  17. jaxative says:

    Which parts are you objecting to and what is your evidence? Meh, you can make a statement like that about anything you want without evidence, this is the internet after all, but don’t expect anyone to take you seriously with a comment like that about an article full of comments that Rand Paul is actually on record as saying.

  18. jaxative says:

    You can tell that the guy used to be a surgeon, all he wants to do is cut.

  19. jlfliberty says:

    Envy those with the guts to risk everything to try and get ahead? Of course, they employed you didn’t they? Go on coveting, condemning and playing it safe bookkeeping.

  20. jlfliberty says:

    My first time here and surprised that people can really stomach reading this blatantly slanted bias. Does it not insult your intelligence? Maybe for those with Johnathan Grubber voter intellect but then I didn’t think they read anything.

  21. BeccaM says:

    He’s also engaging in ad hominem attacks rather than actually bothering to respond to anything you wrote.

    Both tactics are the dishonest rhetoric of someone who doesn’t actually have anything to add to the discussion.

  22. Max Mills says:

    An argument from authority instead of a response to the arguments? Not sure how to respond to that. A quick google found a bunch of economists agreeing with what I have said here. I am sure you could find many disagreeing. You might have to, Lord forbid, use your brain.


  23. marknc says:

    A death by a thousand cuts is the goal. A little piece here, another there. Eventually you can kill it

  24. marknc says:

    End it – Ohhhh no. They would get blamed in the light of day. Instead the strategy is to kill it by slowly degrading SS to the point that it is useless. Retirement is already 67, they are proposing 70. Then 72, 75 – why not 80? They want to eliminate participation by privatizing to water down the funding so they can say it doesn’t work. You know the game whether you admit it or not.

  25. marknc says:

    Millions of people have relied on SS and still do. It has kept them from living in their children’s basement and from dying prematurely.

  26. BeccaM says:

    There’s this thing called “marginal rates.” The boundaries are irrelevant because as soon as you earn $1 more than the boundary, the money you earned under it isn’t suddenly subject to the higher rate. The current U.S. income tax code already incorporates this marginal taxation feature.

    BTW, you might want to look up what the ‘straw man’ argument really means. It’s an informal fallacy where one gives the impression of refuting an argument, when what was done was the original position was misrepresented. It’s an illusion of winning an argument because the thing you knocked down — the ‘straw man’ — wasn’t the original argument in the first place.

    I think you meant red herring.

    Also, I don’t see why capital gains shouldn’t be taxed at the same rates as ordinary income. Why is income derived from no labor valued more highly than income derived from productivity and labor?

    I’ll also posit this: Capitalists do not need incentives to invest money. Capitalism as practiced in the U.S. needs more ‘fettering’ not less. The fetish for deregulation is what’s led us into this gaping chasm of income inequality between the rich and the poor.

  27. Duke Woolworth says:

    Taxes or food. Your choice.

  28. goulo says:

    “The problem with tax brackets is that it creates perverse incentives
    around the boundaries, because a slightly greater income will result in
    less actual income.”

    Sure, it’s stupid if a system is set up like “If you earn $0-30000 then you pay 15% of all your earnings; if you earn $30001-60000 then you pay 20% of all your earnings” since then indeed someone who earned $30000 ends up with more money than someone who earned $30001.

    But as long as we are magically reforming the tax code, we can certainly do the sane thing at boundaries (the higher tax rate only applies to the dollars in that bracket). That’s not rocket science.

  29. Matthew Lloyd says:

    Always great to hear a lecture on economics from someone with a degree in computer science. Give us analysis from some actual experts in the field, and we might be more inclined to listen to you.

  30. Timothy Schmid says:

    I’m not convinced. I would need an actual evidence-based analysis on costs and benefits. California is an anecdote, and some states spend at a deficit, so the federal government would have to fund education one way or another, not to mention that states would all have to make a shift in spending in unison. Leaving it up to the states means that there might be differences from your proposed ideal paradigm shift, particularly in regards to uniformity of education. Not testing, education, as in the actual curricula of the schools, which standardized testing only really affects in a bad way. Standardized tests don’t guarantee anything substantial, and in bad systems like NCLB they’ve made things worse.

  31. johnnytrigger says:

    The constitution speaks to education not being the federal govt’s responsibility. The 10th amendment logically assigns such responsibility to the states & the people. We agree uniformity is good in education. Standardized tests have their place and have existed before the Dept of Education started in the late 1970s. Overall, state & local govt funds approx 90% of education spending with the Dept of Education covering the remaining 10%. In CA we spend more money on prisons than on higher education largely due to “tough on crime” laws that are excessively punitive, racially skewed and evidence of a flawed criminal justice system. A reprioritization of spending at the state & local level could make up for the 10% lost due to the elimination of the federal dept of education.

  32. Timothy Schmid says:

    The mistakes of No Child Left Behind do not speak to education belonging to local government, but to the flaws in that particular system. A uniform K-12 education requirement all across America would have massive benefits from consistency for employers, colleges, and children in residentially mobile families. Funding is also a big issue, considering that public schools depend on federal funding to offset the inequal and insufficient contributions of property taxes.

    The Dept of Commerce I’m not so sure about. From Google, it seems to be a bipartisan issue, and a well-reasoned one, so I think I can agree with that.

  33. Timothy Schmid says:

    The problem with tax brackets is not their complexity of calculation. That’s an utter strawman. The problem with tax brackets is that it creates perverse incentives around the boundaries, because a slightly greater income will result in less actual income. http://news.morningstar.com/articlenet/article.aspx?id=686983

    Capital gains taxes should not be as high as income tax as well. We want to encourage savings and investment, and an equal tax rate would not mean indifference between spending and saving, due to the risk inherent in investment. https://www.aei.org/publication/why-capital-gains-tax-rates-should-be-lower-than-those-on-labor-income/ Replacing income tax with a progressive consumption tax would fix all of those issues, though. http://www.cpajournal.com/old/15410229.htm

    Trickle-down economics is still totally bullshit, though.

  34. johnnytrigger says:

    Thanks Max. Two responses. 1) I don’t know why people are so fearful of letting people keep more of their own money…. or feel a need to zing certain people to pay disproportionately more. Just because a person is rich is no reason to penalize them into paying a higher rate of tax for those earnings. Even in a plan like Rand’s, the wealthy are still going to pay a ton. In most any tax cut proposal the rich are going to get more of their dollars back simply because they pay so much in taxes in the first place. It’s just basic math. If anyone is doing any “shelling out” it is the rich paying to the govt. When almost half of America does not pay federal income taxes at all, how can you reward them any more with tax cuts? Well, you can by cutting FICA taxes. That’s a good thing for American workers since FICA taxes are often more than the federal income tax itself. 2) Rand has stated numerous times that he would cut all corporate welfare before he would cut a penny of the social safety net. Rand wants to spend about $3T per year on govt policies, the vast majority of which fund social safety net programs. Is $3T not enough?

  35. johnnytrigger says:

    Education is the constitutionally defined role of the federal govt. Bush dramatically expanded the Dept of Education to push a flawed No Child Left Behind, one size fits all type of plan. Such programs should be eliminated. The Dept of Commerce, on the other hand, largely funds corporate subsidies or takes on sales & marketing functions of corporations for international business development. Businesses need to fund their own business initiatives. There are many very important roles for the federal govt, but these two departments would be low priorities for the federal govt, IMO. Education should be a high priority for state/local govt.

  36. Timothy Schmid says:

    Why exactly do you believe that the Depts of Commerce and Education should be eliminated? 0_o

  37. Jon Green says:

    Either the plan gets rid of all tax breaks, or it doesn’t. If it doesn’t, fine, but then don’t call it a completely flat or fair tax.

  38. Max Mills says:

    I did not say you believe tax rates should be zero, I used your belief that tax rates should not be zero to attack the proposal that a tax plan, and “what it means” for Americans, can be determined through a rate calculator.

    The good aspects of this plan are good bait, but they will draw us into a plan which ultimately shells out to the rich and forces us to cut, and Rand’s policies make it clear that economy-stimulating safety net programs will be among those axed for his corporate and wealthy tax cuts.

    Eliminating the loopholes is meaningless if you do so by cutting taxation to 5% below the average loophole’d tax rate. This plan is a wolf in sheep’s clothing.

  39. johnnytrigger says:

    Thanks Max for your fine article. But you are misunderstanding here. I believe taxes rates should be lower, but that doesn’t mean there should be zero taxes. It is a matter of degree. I think it is rather obvious that Rand’s plan would lower tax rates for virtually all Americans except those wealthy and corporate powers that have taken advantage of the current code to pay at or near $0. I was simply offering agreement with the previous poster that a calculator would be a fair tool to use to assess exactly how much a person’s tax rate would change… and to give them assurances they would pay less then the current rate. IMO, a tax plan is good if a) it lowers taxes rates for everyone, b) it includes corresponding pay-go cuts in spending targeted at low priorities and bad policies, and c) it unwinds the rigging of the tax code that benefits special interests for the politically powerful. By my own criteria Rand’s plan qualifies.

  40. David Heinrich says:

    SS was already an ill-conceived pay-as-you go pyramid scheme when people were only living a few years beyond the retirement age, and it is plainly unsustainable with lifespans reaching into the 80s, 90s, and even 100s. If you think social security will be around by the time you retire, you are a fool.

    Save as much as you can via a combination of HSA and Traditional/Roth IRA/401k and invest it as appropriate in various index funds, given your risk-tolerance and beliefs about the future economic success of the US and world. (100% international+US equities index fund is the most aggressive; add in 40-60% bond index funds to protect from some economic environments with little cost; go to 25/25/25/25 equities/bond/gold/cash-equivalents to provide protection in more economic environments).

    If you are relying on the government for your retirement, you might as well plan on working forever.

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  42. Max Mills says:

    If you agree that we should not reduce all taxes then you also agree that a calculator that tells you whether or not your taxes would go down is a really dumb way to determine whether or not a tax plan is good

  43. Carrion is exactly how these vultures feed. Of course these assets are not mine – and no less than 95% should be used for the benefit of society (which includes the beneficiaries that should keep, at most, a generous 5%.)

  44. Finally, we agree. Minimizing taxes should be all the way down to a rate of no less than 95%.

  45. johnnytrigger says:

    The concept of the estate or trust seems to me to be a mechanism to allow assets to be passed down to heirs while minimizing taxes and the complexity of probate. It is more of a legal maneuver than anything.

  46. johnnytrigger says:

    You seemed rather angry in your description of the trust fund babies. Further, just because some of the rich have disdain for the lower class, that doesn’t mean all of them do. I know many kind hearted, generous wealthy folks that work hard to help others that are disadvantaged. So why penalize the whole lot for the bad behavior of a few? Ultimately those assets are not yours. The appropriation of those assets should be the business of the deceased as outlined in a will, or the business of the survivors in the family to use to pay off any debts and split the remainder as they agree, including donating some to charity if that is the wish of the deceased or the family (if no will was drawn). That’s my opinion. You have yours. Carry on.

  47. johnnytrigger says:

    Well, no one is suggesting that all taxes be completely eliminated. But, considering the huge increase in spending during the Bush administration when expenses went from approx $1.8T to $2.9T, plus the Obama spending which carried it further north (Obama recently proposed a $4T/yr budget), I think there is plenty of room for a reasonable and responsible reduction in spending which is accompanied by tax cuts. Such a plan would give great relief to the middle class.

  48. You are right. We disagree. However, if you were correct and the money was the family’s… there would be no need for estates or trusts!

    The money legally belongs to an individual, and any passed down is legally unearned income by/to the beneficiaries. That’s the law. We have that now, and we have estate taxes now.

    However, Rand Paul thinks the rate should be 0%. I think it should be 95%. I am not “angry” because I think and make excellent arguments – quite eloquently I believe – that it should 95% or more. Is Rand Paul angry because he thinks it should be 0% and believes the lazy, stupid, over-entitled trust fund babies of the Kochs and the Waltons need even another $60 Billion in tax-free unearned income?

    I commend you for subsiding your parents. I am not certain these people didn’t harm you, and think there’s a huge “yet” in many cases.

    Have you ever seen “The Revolution Will Not Be Televised”? It really shows the unfiltered contempt and hatred (in another country, but these class things are the same everywhere) some upper-class people fester towards their fellow citizens (their maids who live in shacks with no water.) This dumb bitch – who has literally never worked a day in her life – is screeching about how lazy and awful the help is because they are demanding enough wages to afford indoor toilets. Of course, her grandfather was the hardest working man in history what with that cushy bank president job he’d held 40 years earlier.

    Here in America, that exact same invective is directed at blacks and the poor – and it couched in terms like “uppity”, etc. – but it’s there. Right now, they’re talking about why your parents were too lazy to properly take care of themselves, and how uppity the pool boy has become.

  49. Max Mills says:

    The problem here being that whether or not something will lower your personal taxes doesnt necessarily mean anything in the discussion of whether it will be good for the nation or, by extension, you.

    We could abolish taxes completely and we would all pay a lot less and also be way, way worse off.

  50. 2karmanot says:

    Libertarian ‘thought’ to use the term loosely is very easy to spot. It’s a bit like a second year law student who feels they have discovered the load stone when applying false ‘facts’ and fake quotes to a paradigm of linear reasoning and then announce that logic has been served to define a basically false premise. I suspect that Thomas Aquinas was first Libertarian in his dance of proofs for the existence of god.

  51. johnnytrigger says:

    I stand corrected mixing up estates and trust. Mea culpa.

    However, we disagree on the core issue. You believe the govt should take the family’s money (which is now in an estate). I believe that money is the family’s and the govt should not be involved.

    Sorry to hear about your anger towards those inheriting money. I figure they did nothing to harm me, so why should I harm them? Carry on.

    BTW – I will inherit nothing. I come from a dirt poor family. I actually subsidize my parents.

  52. You are confused or lying. Estates do not manage family assets. Trusts can do that.

    Many Estates use Trusts as a vehicle for transferring the assets of the dead person – who couldn’t be bothered to spend their wealth which would’ve created sales tax income had they spent it; along with payroll tax income from the people building the items sold, and people selling the items sold, and people servicing the items sold; and income tax from the people have jobs because all these other people now have income to spend – so society should protect itself from lazy, stupid, over-entitled trust fund babies by taxing these estates at 95% minimum over, say, $15 million and 100% above $50 million (or less).

    BTW – I don’t give a fuck what you would or wouldn’t wish to do with my assets so I’m quite sure that doesn’t strengthen your argument.

  53. johnnytrigger says:

    First of all, Bush’s plan for SS didn’t even pass the GOP controlled Congress. So if the GOP wanted to do as you say, then why didn’t Bush’s plan pass?

    Secondly, Bush did not want to privatize SS. His proposal required people to keep the vast majority of their withholdings in the same govt run SS system status quo. Workers had a choice to invest a tiny sliver of their future withholdings in alternative vehicles (some private) or keep all 100% in the govt run system status quo. Plus all historic withholdings remain in govt run system. Can’t be privatized if it remains mostly a govt run system.

  54. johnnytrigger says:

    We agree that the home mortgage interest deduction favors property owners. Clearly this plan keeps that deduction because of its popularity and Rand’s desire to give the plan a chance to succeed. However, my understanding is his plan also makes rents paid to landlords taxable at the 14.5% rate. Rand’s plan doesn’t fix everything, obviously. But, IMO, it is a huge improvement over what exists today.

  55. emjayay says:

    I’m pretty sure the evidence shows that Republicans want to turn SS and Medicare into Wall Street/corporate based profit making voucher systems. Then maybe kill them.

  56. emjayay says:

    So, why should home mortgage interest be deductible when the part of rent that is paying interest on the building loan is not? This makes for a regressive and anti-urban element in the income tax system, just like now.

  57. emjayay says:

    The big flaw in all these write your tax return on a postcard plans is that I could do it now and could always do it. But anyone like all the sainted job creating smaller entrepreneurs for example can and do cheat in every way possible. They have to document all their expenses like for the “office” they already had as the guest bedroom or the “business meals” that were them and their friends using their business credit card or the car they would have bought anyway, besides all the other ways of cheating.

    Trust me. I was a bookkeeper.

  58. emjayay says:

    No. They will be seen as welfare if lower class people get them without any contribution. More free stuff for the takers, with the makers paying for all of it.

    Anyway, if there is apparently no way to even raise the contribution cap in a statistically backed way to make SS solvent, what chance is there to shift ALL contributions to the upper half of incomes? (Answer: none.)

  59. johnnytrigger says:

    True, if SS & MC are means tested.

  60. emjayay says:

    I wouldn’t mind an exemption for a million or two like there used to be.

  61. emjayay says:

    Turning Medicare and Social Security into welfare programs.

  62. johnnytrigger says:

    Perhaps. Rand is actually leading Hillary in Ohio, PA, Iowa, CO and NH… all critical swing states. Rand is also leading Hillary nationally amongst independents. If he won the GOP nomination, I think he would have a good chance of winning it all. But I only see about a 25-33% chance of winning the GOP primary. It is still early. Anything can happen.

  63. emjayay says:

    How would no income taxes up to $50K make right wingers shut up about the 47% and low income people not paying their way?

  64. Houndentenor says:

    Every person running for president talks as if they will be able to work with Congress in ways that the last umpteen presidents could not. I think some even have big enough egos to believe that. It’s never happened in my lifetime, so assumptions that the new president will have an easier time getting things through an unfriendly Congress is naive (and that’s being kind).

    Most of the house is gerrymandered into safe districts. They do not fear being kicked out of office. They are far more afraid of losing the big donors. And that is the entire problem. If you don’t address that, nothing changes.

  65. Houndentenor says:

    So we’re arguing about nothing because Rand will not get the nomination and wouldn’t win the general if he did.

  66. Houndentenor says:

    That’s all guessing and fine for cocktail party conversation but a real plan should have hard numbers. What would this plan bring in and exactly what cuts would be required to make up any shortfalls? That’s a reasonable question. You’re playing the same game Republicans always play when selling a tax cut and in every case it’s caused huge deficits. I am not supporting any plan without specifics nor should anyone else.

  67. johnnytrigger says:

    Hey, I never said this would be easy. Obviously there is a lot of horsetrading that occurs in Congress. This bill would not fly through untouched. But my point is that with the election of a new president, there is often a change in congress, both in terms of new faces, but also in terms of energy/dynamics/behavior. If someone like Rand (or Bernie) was elected, it would be representative of the people demanding tremendous change from the irresponsible leadership currently in Washington. If establishment politicians dug their heels for the status quo, they would be doing so at risk to their re-election.

  68. johnnytrigger says:

    Even if Rand won the presidency (admitted long shot), his plan would be modified by Congress if a version of it passed. That’s how compromise works. Same thing happened with ACA.

  69. johnnytrigger says:

    I agree that more detail would be helpful, however plenty of nuggets have been released. One such nugget is that this will reduce overall govt funding by approx $200B/yr. As a result, spending cuts will need to occur. Given the insane spending of the Bush administration, combined with Obama’s incremental increases, there is plenty that can be trimmed. Eliminating the Depts of Commerce and Education alone can make up about 50% of this revenue shortfall. Add in scaling back wars, scaling back corporate welfare, scaling back NSA surveillance, scaling back war on drugs, and more… and the math on this plan should work quite well.

  70. Houndentenor says:

    I actually agree with Rand Paul on a number of things.

    You seem naive about how Washington works. Yes POTUS could veto a spending bill which would shut down the government and default on our debt obligations. Imagine Ted Cruz and company demanding increases in defense spending and willing to run the entire economy off a cliff if he doesn’t get his way. A reasonable government could work out our current problems. But we don’t have that. We don’t have more than a handful of reasonable people holding elected office at the national level.

  71. johnnytrigger says:

    Bush nearly doubled the size of the Dept of Education and increased funding for national parks, as well as dramatically expanded Medicare and continued growth of Social Security. If GOP wants to privatize these parts of government, then why did they increase funding for them? The reality doesn’t match your rhetoric.

  72. Houndentenor says:

    ACA is not in any way the plan Obama ran on. It’s an old Republican plan and even then they wanted no part of it.

    And yes, a tax plan that increases taxes on rich people is not getting through because congress has been bought and paid for. We need to overturn citizens united and change how campaigns are financed overall as well as how lobbying works before we can even hope to pass anything like this.

  73. Houndentenor says:

    Well that is quite informative for the hypothetical family of 4 earning under $50k/yr. It’s what I hate about these discussions. They give one or two examples and the rest of us are supposed to extrapolate our own tax rates from that. No thank you. I want details, because that’s where ever proposal like this disintegrates. Also, this plan is going to generate as much in taxes as the current system?

  74. johnnytrigger says:

    We both know what a progressive tax system is. Such a plan taxes different slices of income at different rates such that the lower income ranges pay zero or a very low rate up to the higher income ranges paying at much higher rates. The actual rates of this plan are progressive (just two slices: above $50K and below $50K for a family of 4), and are progressive based on effective rates too. Perhaps you are comparing it to the current plan that is progressive and has approximately 5-6 slices of income ranges & rates. Rand’s plan is still progressive, just less ranges. A pure flat tax would be 1 range. Rand’s plan is not a pure flat tax.

    Yes, I like Rand and his plan as I think it is a huge improvement over the current plan of 70,000 pages of tax code that rigs the system for powerful interests while making poor and middle class pay a regressive rate on FICA. But I am simply focused on facts and doing so in a polite, civil manner. I have no disrespect for you or your political perspective. Have a great day.

  75. BeccaM says:

    I still maintain you don’t understand the actual literal meaning of a progressive taxation system. ‘Effective’ rate isn’t what I’m talking about and your constant cheerleading for Rand Paul — a man whom I despise for many reasons, including his ala carte faux libertarianism — has become tiresome.

  76. johnnytrigger says:

    Estates manage the family assets and are generally controlled by family members themselves. If a person wants to pass along his assets to his spouse or children upon his/her death, then why should the govt take a minimum of 95% of these assets? After all, if you want to pass down your assets to your children upon your death, I would never wish to take your assets forcibly and hand them over to the Pentagon.

  77. Assets of dead people don’t belong to “families.”

    They belong to “Estates.”

    Estates which should have a minimum of 95% tax rate on this unearned income (unearned by the estate and any beneficiary – if the person who earned it wants to spend it before they keel over, no one is stopping them) over, say, $15 million and 100% above $50 million (or less).

  78. johnnytrigger says:

    Actually you are advocating having the govt take away the family’s assets. At least 95% per your original post. Be nice.

  79. To protect us from dumbfucks like Rand Paul, Donald Trump, George W. Bush, Malcolm “Steve” Forbes, Jonah “The Doughy Pantload” Goldberg, The Walton Family, Lizard Cheney, etc., ad nauseam.

    You seem to be confused – I am not advocating taking anyone’s assets.

    See, the children don’t own anything until the estate is settled – this is a legal thing, so it isn’t their fucking money. And the person who left their money to the estate is fucking dead so they don’t actually give a fuck about money they once had so much of they couldn’t even actually fucking spend it all.

  80. Bones1389 says:

    Max, do you dispute the claim that more domestic jobs will be created when the 14.5% tariff applies to imported goods combined with the revenue gained from taxed imports (even if there are fewer of them as a result of the tax)? You talk about multipliers for food stamps? Wouldn’t the multipliers from this plan be far greater?

  81. johnnytrigger says:

    Today the funding for SS and Medicare is not enough to cover its expenses. The programs are cash-flow negative. MC Part D was passed with a huge increase in expense without any incremental increase in revenue. The lock box has been drained to pay for wars. So clearly the current model is not working. Further, even Obama/Dems agreed that a payroll tax holiday was a good stimulus for the economy. Why not give workers a break from this regressive FICA tax? Moving the burden of SS and MC to the rich and to corporations has been a wet dream of progressives for decades and now here is a plan that proposes just that.

    Yes, the plan is progressive. If a family of 4 makes $50K/yr or less, then pay 0%. If they make $100K, then they pay an effective rate of 7.25%. If they make $200K, then they pay an effective rate of 10.875%, and so on. That’s a progressive plan. The more you earn, the higher your rate. Basic mathematics.

  82. 2karmanot says:

    I applaud your self awareness.

  83. BeccaM says:

    You don’t seem to know much about why Social Security and Medicare were given their own dedicated funding sources. Transferring them to general gov’t funding has been a wet dream of conservatives for generations now, as step one in “how to kill Social Security pensions and Medicare insurance through a thousand cuts.”

    Progressive taxation is NOT, by definition, an exemption for $50k family income — which really isn’t that much these days — and a flat tax on everything after that. If you think that’s ‘progressive’ taxation, I have to ask if you actually understand the meaning of the word.

    In any case, I have zero respect for a guy who fills his books with fake quotes.

  84. 2karmanot says:

    Or Rand Paul, Donald Trump and Rick Perry swapping hair tips.

  85. johnnytrigger says:

    Yeah, those GOP hate Rand largely for his foreign policy. It would be a matter of putting the GOP’s money where it’s mouth is in terms of spending cuts, especially on domestic items. POTUS could also veto a budget without enough spending cuts.

  86. johnnytrigger says:

    I share your opinion.

  87. johnnytrigger says:

    It would be tough, but it is doable. After all, it was difficult but achievable for Obama to pass ACA through Congress, right? New congressman/senators would be elected riding on coat tails. Existing in DC would understand mandate offered by the people in electing their new POTUS. When a plan offers huge benefits to the working class and lowers taxes for everyone, you’d think that would be passed right? Certainly the Reps/Dems in bed with the rich should like many parts of this as well (even in spite of losing their treasured loopholes).

  88. johnnytrigger says:

    I agree. An online calculator would be best. But his plan is laid out rather clearly, especially if you are a family of 4 earning under $50K/yr. You’d pay $0 in federal income tax and $0 in FICA tax.

  89. Houndentenor says:

    Is there any chance of getting that through Congress? Regardless of what plan a president touts, such changes would have to pass both houses of congress and I don’t see any chance either one with either party in control would pass this.

  90. Houndentenor says:

    Assuming you are correct, the Republicans in the house and senate who would have to approve any spending cuts ARE those very Republicans you claim Paul isn’t like.

  91. Houndentenor says:

    We keep being told that about tax cuts and then the spending cuts don’t happen and we wind up with more deficit. Cutting taxes is easy. Cutting spending is hard. Pretending it isn’t is not just naive, it’s idiotic.

  92. Houndentenor says:

    Here’s my suggestion. If you want to sell a tax plan, then create a website where people can go and punch in their numbers from their last few years of taxes and see what they would have paid under that plan vs what they paid under the existing one. That way people will know what it means for them.

  93. johnnytrigger says:

    Rand’s plan eliminates those 70,000 pages of loopholes that the rich employ accountants and lawyers to navigate. The only deductions would be for charitable contributions and home mortgage interest. You are inaccurate: Rand’s plan taxes capital gains the same as labor income. Rand’s plan also eliminates the cap to fund SS&MC. Taxes to fund SS&MC are shifted to the income tax, largely paid by the rich and corporations, saving hard working families $2K-$4K/year. Plus the end result is still a progressive income tax plan since the first $50K of income for a family of 4 is not taxed at all.

    So many wins in this plan for progressives and the American people.

  94. BeccaM says:

    There is nothing wrong with a truly progressive tax system, which is why such was proposed and implemented in the first place.

    Rand Paul’s system carves out one small exemption at the lower end — the progressive part — and then hopes none of us will observe that if the tax rate kicks in for every dollar earned over $50k, why not tax the first $20k over that at a lower rate than the $20k earned over $1m?

    Five or even ten different tax brackets aren’t that hard to calculate, and we have tables and tools to do it anyway. The real problem of course is all the different ways the wealthy have found to exempt their income from the income tax. From estate taxes to capital gains to stock options to the offshoring of income to the reclassification of income to whatever category is more favorable, the plutocratic bastard class has found ways to make it so the money they collect as income isn’t taxed as such.

    As for ‘trickle down’, we’ve learned already for the past 30+ years that it’s a joke. Wages for the lower 80% of workers have stagnated — and it’d be even worse if more families didn’t have multiple wage earners working more hours than ever before. Nearly every dollar of increased productivity and GDP growth over the last generation has gone to the 1% and especially to the 0.01% wealthiest.

    Rand Paul’s proposal would only make this economic inequality even worse.

  95. Max Mills says:

    And from the first link here is him calling it servitude and condemning food stamps and the like with similar reasoning
    As humans, yeah, we do have an obligation to give people water, to give people food, to give people health care,” Paul allowed, “but it’s not a right because once you conscript people and say, ‘Oh, it’s a right,’ then really you’re in charge, it’s servitude, you’re in charge of me and I’m supposed to do whatever you tell me to do.”

  96. johnnytrigger says:

    Exactly. The “food stamps are slavery” is a fake quote. Totally made up.

    If you think Rand is just like Bush or the other Republicans, then you are really not paying attention. The other Republicans in DC HATE him. He is proposing to scale back wars and interventionist foreign policy. He is pushing to reform criminal justice that unfairly harms inner city minorities. He is pushing to lower taxes on the working class. He is fighting for 4th amendment civil liberties.

  97. johnnytrigger says:

    Letting a family member pass on a gift to their children is entirely reasonable. Why does the govt deserve that? After all, I would never propose that the govt take 95% of your assets and hand it over to the Military Industrial Complex.

  98. Max Mills says:

    Full quote is here. Looks like it’s mostly about healthcare, but that doesn’t make my response to your ‘Rand is different’nonsense any less effective. They’re all horrible.


  99. johnnytrigger says:

    Except there is no quote from Rand saying Food Stamps are slavery in the article above. And if you click on the link in the article above, it takes you to another page (http://thinkprogress.org/justice/2013/08/26/2525961/rand-paul-food-health-libertarianism-hayek/) that also does not quote Rand saying Food Stamps are slavery. Check it out yourself. It is entirely made up.

  100. Max Mills says:

    Link is literally in the article

  101. johnnytrigger says:

    What can a clever lawyer do when all of the clever loopholes that they used to use are gone?

  102. johnnytrigger says:

    Please link to Rand’s quote backing your claim. I can find no such quote.

  103. The real question isn’t how much it costs the middle-class, it’s how much do the Kochs and Waltons save? At least $30 billion each with no Estate Tax.

    Instead, we need a “Trust Fund Baby Protection Act” that raises the Estate Taxes to at least 95%, to protect us from these fucking assholes who, simply because their father was successful and/or wealthy, are in a privileged position to inflict their clueless, shamelessly destructive agendas on the rest of us.

    Kinda like Rand Paul….

  104. nicho says:

    Libertarian swarms are actually kind of fun. Since there is no coherent political thought among them, they just buzz around bumping into each other and spouting things that don’t make any sense. It’s kind of like Three Stooges Meet Keystone Cops.

  105. nicho says:

    Members of the Paul Clan share a common trait. They make sense for about five minutes — suckering in the weak minded — then, they go completely off the rails.

  106. johnnytrigger says:

    Their policies say otherwise, even when they have full control of Congress and WH. See Medicare Part D and continued COLA increases for SS. If they want to kill those programs, then why do they vote to do the opposite?

  107. nicho says:

    Oh, they find other ways to pass it around to get by the capital gains tax. They have very clever lawyers. Beware of anything proposed by a Republican or a so-called libertarian.

  108. nicho says:

    Please, the GOP and libertarians masturbate over fantasies of ending social security and Medicare, along with free public education, health care, and public ownership of the commons.

  109. Max Mills says:

    … He called food stamps slavery

  110. dcinsider says:

    Rand Paul is mentally ill.

  111. johnnytrigger says:

    If you think GOP wants to end Social Security and Medicare, then you are not paying attention.

    Let’s pretend for a moment that the GOP actually ended both programs. Do you think the old people would ever vote for them again in significant numbers? Do you think a GOP politician would win?

    Ending SS and Medicare is a sure fire losing strategy for the GOP.

    So, when you see LWs ranting about the GOP trying to end SS and Medicare, what you are really seeing is scare mongering.

    Actually look at the details of GOP proposals on SS and Medicare. There is no plan to eliminate them. In fact, the GOP massively expanded Medicare for Part D/Prescription Drugs. And even Ryan’s plan expands funding for Medicare.

    Focus on facts, not rhetoric. And certainly not scare mongering.

  112. johnnytrigger says:

    Rand is not like other Republicans.

  113. marknc says:

    Which would achieve the Republican goal of killing the SS system dead in its tracks

  114. johnnytrigger says:

    What is here?

  115. johnnytrigger says:

    No. SS and Medicare would be funded through the income tax. And guess what? There is no cap on income like there is now with FICA.

  116. marknc says:

    Because Republicans pick those whenever asked AND because Republicans LOVE things like the NSA, military, corporate welfare, war on anything, etc. Of course yu are probably right about Commerce and Education. Regulating business to keep them from screwing consumers is a bad thing in Republican land and they would eliminate all education if they could.

  117. 2karmanot says:

    side note: What is it with poor old HP, first an incompetent vulture like Fiorina and now a stuffed turkey like Whitman?

  118. FICA is SS and Medicare taxes. Its how those programs are funded. If you do away with those taxes they die.

  119. 2karmanot says:

    …..They’re here

  120. 2karmanot says:

    5-4-3-2-1 Here comes a Libertarian swarm.

  121. johnnytrigger says:

    It’s a revenue “loss” of about $200B/yr. This can easily be offset in spending cuts. Ending the Dept of Commerce and Education would make up almost half of that $200B. Scaling back wars, scaling back corporate welfare, scaling back NSA, scaling back war on drugs and more can easily bridge the gap plus more. Why do you think SS and MC would be gutted?

  122. johnnytrigger says:

    Rand’s plan does not tax a family of 4 earning $50K/yr or less a single penny. No federal income tax. No FICA tax (7.65%). That’s a huge win for working people. In fact, all working people no longer have to pay the FICA tax.

  123. johnnytrigger says:

    Meg would pay 14.5% of her capital gains income in the Rand plan… and all of the loopholes to avoid paying tax, with the exception of charitable contributions and home interest deductions, would be eliminated. Profitable orporations and the wealthy who hire lawyers and accountants to pay $0 in income tax would be a thing of the past.

  124. bkmn says:

    Don’t tell me, with the deficit this would produce Rand would gut Social Security and Medicare.

  125. nicho says:

    Which means Meg Whitman, head of HP, would pay no tax, because her “salary” is only one dollar. The One Percent has found ways to pass money around that are exempt from income taxes.

  126. nicho says:

    Over the years, I’ve heard dozen of proposals for a flat tax. Every one of them screwed working people and benefitted the one percent.

  127. Keith says:

    The tax would only apply to income over $50,000. So a family earning $60,000 would only pay $1450 in Federal Income Tax.

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