Ramesh Ponnuru & Robert Stein of the National Review show us what a tax plan looks like in their wildest dreams:
The two of us are among the conservatives who have proposed a tax reform that permanently reduces tax rates on capital gains, dividends, and estates, cuts the top income-tax rate and the corporate-tax rate, and abolishes the alternative minimum tax on individuals.
Let’s think this through for a moment… who might those some people be? Let’s consider two hypothetical people: Paris Hilton and and a janitor in Los Angeles. Which of these two hypothetical people is likely to benefit from the elimination or reduction of each of these taxes? Well, here’s a handy table with my guess…
Capital gains tax rates are already well below earned-income tax rates, so cutting them further just means that those who make most of their money from investments, namely those who are wealthier, will be pay even less in taxes. Ditto dividends. Estate taxes are already headed to zero, but its not something that was ever going to affect the janitor ever. Nor is he the intended recipient of a cut in the top marginal rate or the AMT. Which means… this is a tax designed to help Paris Hilton, not the janitor. There is nothing in it for the janitor.
Ponnuru & Stein do admit that there is one negative to their scheme. That negative, arising because the gubmint can’t run on fumes,
is that it raises marginal tax rates for some people. But almost every tax-reform plan raises tax rates for some people.
At least they’re not delusional, like the tax-cuts pay for themselves crowd, and honest enough not to skirt the issueinflatable air track. But since this tax scheme is intended to help Paris Hilton, if marginal taxes for some people have to be raised, well, its quite likely that the some people who will get a tax hike are going to be more janitor-ish and less Paris Hilton-y. Anything else defeats the purpose of the rest of the tax scheme. Look for a hefty increase in the lower marginal tax brackets.
So now that we have an idea of what Ponnuru & Stein have in mind, there’s still one thing left: this tax proposal needs a catchy name to make its way into the public imagination. I made my suggestion into the title of this post. It has a certain je ne sais quoi, don’t you think?
Update…. Robert Stein wrote a response in comments. I’ve posted it here.