Although most Americans say their income taxes are fair, today is “Christmas in April” for Republican politicians trying to stir up resentment about the tax burden. As I mentioned yesterday, last year’s stimulus bill contained tax cuts for 98 percent of American families and particularly helped lower and middle-income families. Gail Collins commented,
Thanks to the tax credits in President Obama’s stimulus plan and other programs aimed at helping working families, couples with two kids making up to $50,000 were generally off the hook this year.
Naturally, anti-tax groups held rallies to thank the president for doing so much to reduce the burden on the half of the country least able to pay. Not.
One of the biggest tax breaks in the stimulus bill reduces taxes owed by $400 for individual filers and $800 for married couples filing jointly, but reportedly this credit and the accompanying “Schedule M” have confused many taxpayers.
Here’s a truly disturbing trend mostly ignored by the media. Annie Lowrey reports that in recent years the IRS has shifted toward more audits of mom-and-pop businesses and less scrutiny of the big corporations that “can defraud the federal government for much more vast amounts than their smaller counterparts.”
At today’s anti-tax rallies, some speakers will argue for a “flat tax,” meaning that the income tax would be set at the same level regardless of your income. That’s a bad idea, which hasn’t worked in countries that have adopted it.
Other conservatives, such as Representative Steve King and presidential contender Mike Huckabee, will repeat their support for a “fair tax,” which would replace the income tax with a huge consumption tax. That’s a terrible, horrible, no-good very bad idea.
Speaking of conservative fantasy-land, Senator Chuck Grassley decided to make stuff up during a conference call with reporters yesterday:
Grassley spoke of his belief that America is sliding toward a European-style economy. Actually, he said the Obama adminstration is moving the country in that direction, so he envisions President Barack Obama will ask for a tax increase via a value-added tax, since he can’t politically backtrack and increase income taxes on middle income people.
“They are going to need European-type taxes to maintain it, and that’s where the value-added tax comes in,” Grassley said. “…They just can’t get enough money from taxing wealthy people, to do all the things that they want to do. So you can add a value-added tax, and it is a hidden tax, because it is built into the price of the commodity you’ll buy. So, they can increase taxes on middle income taxpayers, contrary to what they promised in the election.”
Today’s rallies will surely generate a lot of media coverage, as well as some controversy over how significant the “tea party” movement is. Blog for Iowa cross-posted a piece from News Corpse casting doubt on the political strength of tea partiers.
I’m watching several upcoming Republican primaries as a test of the tea party in Iowa. If Dave Funk does surprisingly well in the third Congressional district, Chris Reed wins in the second district, or Mike La Coste or Jim Budde exceed expectations in the first district, that will be a sign of real grassroots power for the movement, but I expect candidates with more GOP establishment connections to win all three of those primaries.
Share any thoughts about taxes or tea partiers in this thread. I’ll be back later to comment, after waiting in line at the post office for who knows how long to mail my return (note to self: get this done earlier next year!).