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Feb 11, 201312:47 PMLeft Business Brain

with Tom Breuer

When it comes to taxes, Republicans think we’re morons

When it comes to taxes, Republicans think we’re morons

(page 1 of 2)

As trial balloons go, this one was a giant hydrogen-and-toddler-snot-filled dirigible, deflated and safely stored away before it could start yet another Capitol conflagration. Oh, the humanity!

In a speech last week, state Department of Administration Secretary Mike Huebsch floated the idea of eighty-sixing the state income tax in favor of a higher sales tax, estimated to be 13% (it’s now 5%, unless, for example, you’re lucky enough to live in a county with a higher-than-average percentage of needy millionaire athletes).

Huebsch offered that Gov. Scott Walker was “considering” the idea. A day later, Walker weighed in, saying he had no plans to pursue a higher sales tax. And of course one thing you know for sure about Gov. Walker is that he’ll never surprise you by making radical changes out of the blue.

So maybe Huebsch just got a wild hair and started riffing, impulsively blurting out a crazy idea about getting rid of the income tax – and, oh, by the way, “we would have to go to about 13, maybe 13 1/2 cents in our sales tax.” Thanks for the update, Scott. Er, Mike. Hmm, sounds to me like someone’s finally found a good use for his old Texas Instruments calculator other than holding it upside-down during late-night budget deliberations and spelling “boobs.” Pretty specific numbers being bandied about for a plan that’s not going to happen anyway, wouldn’t you say?

Of course, even in the Play-Doh Fun Factory of bad ideas that is Scott Walker’s brain, this one stands out. Sure, who wouldn’t want to live in a world without income taxes? It would be nice to go the whole winter without having to shovel snow, too, but the alternative – living in a state that’s capable of electing Mitch McConnell – is so much worse.

It’s perhaps not a coincidence that this trial balloon was launched around the same time we plebes were wringing our hands over our income taxes. Taking the income tax out of the equation is a seductive idea. But as regressive taxes go, they don’t get much more regressive than sales taxes, which is why most governments tend to hold the line on them.

As Chris Walker pointed out at his blog Political Heat, under the tax plan that Huebsch kind of, sort of proposed (most definitely without Walker’s imprimatur – I mean, come on, take off the tinfoil hat), an individual making $1 million a year would have to spend $550,000 in order to equal his or her current state tax burden, while someone making $30,000 a year would breach his or her current tax rate after spending just $5,850. Of course, neither scenario is likely. The individual with the more modest income is likely to spend far more than that because that person needs to, you know, live. On the other hand, the millionaire is likely to save or invest most of his or her money.

So where does that leave us? Back to the same Escher-sketch GOP logic that tells us that taking money out of the pockets of hundreds of thousands of consumers so we can put more in the pockets of relatively few millionaires and billionaires is the way to get our economy back on track. Scott Walker’s anti-Keynesian proclivities are duly noted. The mystery is why anyone should believe his approach is an economic winner when the early returns show that it’s exactly the opposite. (See “Scott’s Unhappy Anniversary” by yours truly and “Did Scott Walker’s budget cuts hurt economy? Some economists think so” by The Cap Times’ Mike Ivey.)

Of course, this same soap opera recently played out on a national level during deliberations over the now-expired two-year payroll tax holiday. The history of the tax cut is long and complicated, but suffice to say, it was a cut that Obama proposed and fought for and that Republicans were, at best, lukewarm about. For example, Paul Ryan called the tax cut a “sugar high.” Rep. Pete Sessions (R-Texas), chairman of the House GOP campaign committee, said extending the cut from one year to two was “a horrible idea.” And when asked whether a payroll tax cut extension would help the economy, House Speaker John Boehner said, “I’m not an economist. I don’t know what kind of impact it’s going to have on the economy.”

Meanwhile, it’s almost impossible for the sun to rise and set without hearing a prominent Republican wax poetic about how income tax cuts are always and everywhere the key to a healthier and more vibrant economy. Indeed, the Bush-era tax cuts, which were far more heavily tilted toward the already wealthy than the payroll tax cut was, were a cause celebre for the GOP, and the party fought like rabid wolverines to keep them.

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Feb 12, 2013 04:05 pm
 Posted by  Anonymous

Just another example of the muddled minds of the LEFT. If you analyze who benefitted from the payroll tax reduction you find that a minimum wage worker got a break of about $360/year while Warren Buffet got a break of about $2300/year.

Now who do you suppose is likely to not spend their windfall?

Plus, the reduced income to SS will result in it going broke sooner as well.

Just another example of a nut case just spouting the BS circulated by a bunch of people that really don't know how to do anything to get the economy moving.

Feb 13, 2013 06:30 am
 Posted by  Anonymous

Haha. I love how the first commenter tries to defend his/her point by calling the author a "nut case" and claiming the left have "muddled minds".... Case in point. They really do think we're morons!

Feb 15, 2013 06:33 am
 Posted by  Anonymous

Agreed. While I didn't actually support the SS tax cut (I really didn't see a huge difference in my paycheck and I do recognize the need to keep funding SS), I do think it makes much more sense to keep money in the hands of people who will return it directly to the economy by purchasing goods and services. Wealthy folks investing in business is all well and good, but the actual economy needs ordinary people to feed it, and a huge sales tax (going back to the original point) is going to damage more small businesses than ever.

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About This Blog

Tom Breuer, IB Web editor, has spent much of his life trying to explain his leftward leanings. As the sixth of seven children from a predominantly Republican family, he's used to being surrounded and ganged up on, so he welcomes comments from conservatives. He is the co-author of three political humor books, including Sweet Jesus, I Hate Bill O'Reilly. Find him on Twitter .

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