Former Bush Press Secretary Ari Fleischer has a sharp op-ed in the Wall Street Journal where he proposes overhauling the tax code in such a way that everyone pays taxes, not just the top 10 percent. This would have the added benefit of making the public pay closer attention to spending programs, because, as he puts it, “It’s funny what happens when everyone pays the bills; Americans may want less spending so they can pay fewer bills.”
Fleischer offers some compelling data to back up his contention that the tax code is unfair as it stands and would only get worse under President Obama’s proposals (here are some stats):
A very small number of taxpayers — the 10% of the country that makes more than $92,400 a year — pay 72.4% of the nation’s income taxes. They’re the tip of the triangle that’s supporting virtually everyone and everything…
As a result of the 2001 tax cuts enacted by a bipartisan Congress and signed by President George W. Bush, the share of taxes paid by the top 10% increased to 72.8% in 2005 from 67.8% in 2001, according to the latest data from the Congressional Budget Office (CBO)…
…the 2001 tax cut reduced taxes for every income-tax payer in the country. He reduced the bottom tax rate to 10% from 15% and increased the refundable child tax credit to $1,000 from $500 per child, both cuts that President Barack Obama says we should keep.
But its this next bit that is the most compelling, particularly as a counter to the claim from President Obama that wealthier Americans paying more is “fare” and past comments from Vice Presidnet Biden that wealthy Americans should be willing to “pay their fare share”:
According to the CBO [non-partisan Congressional accounting service], those who made less than $44,300 in 2001 — 60% of the country — paid a paltry 3.3% of all income taxes. By 2005, almost all of them were excused from paying any income tax. They paid less than 1% of the income tax burden.
The whole op-ed here.
Last week President Obama asked former Fed chairman Paul Volcker, a heavy over at the Group of 30, to head up a task force looking into overhauling the tax code. CQ reported today that it would likely be 2010 before the White House pushes for major change on this.