Bush says national sales tax worth considering
We're finally starting to hear whispers about what George W. Bush might do with a second term as president, and it's kind of scary. Yesterday he suggested that replacing the income tax system with a national sales tax would be a possibility.
To be sure, there are some who think this is a good idea. They also supported tax cuts for the wealthy and tax cuts on stock dividends that reward wealth over work.
Sales taxes are, by their nature, regressive. Proponents argue that they tax consumption rather than earnings, suggesting that because we choose to consume a certain amount of goods and services, we can also control our level of taxation. But some purchases cannot be avoided: even the poor must buy food and clothing, for instance. Unlike our system today, intended to draw more upon the disposable income, however much that may be, of each household and less upon money the household requires for necessities, a national sales tax would siphon off money from precisely the people and places that need it most.
It would be easy to dismiss Bush's suggestion; after all, it doesn't have the kind of widespread support that such a major overhaul of our entire tax code would appear to require. But Bush has managed, in three and a half years, to begin a fundamental shift in the tax code away from taxing wealth and toward taxing work instead--a move that is not in the best interests of the great majority of people in the United States and that does not have broad-based appeal at any but the least contemplative level. If he wins this election, he might consider a national sales tax his due...
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Well, this issue is off the table for now: http://story.news.yahoo.com/news?tmpl=story&cid=536&e=9&u=/ap/20040812/ap_on_go_pr_wh/bush_sales_tax
White House Backs Off Bush Sales Tax Quip
By TOM RAUM, Associated Press Writer
WASHINGTON - Administration officials on Wednesday denied that President Bush is considering a national sales tax, a day after the Republican incumbent created a stir by calling such a tax "an interesting idea that we ought to explore seriously."
Democratic presidential nominee John Kerry seized on Bush's comments — made while the president was campaigning in Florida Tuesday — and suggested such a plan would create a new tax on working families.
"Families already squeezed by rising health care costs, gas costs and college costs would have to carry a whole new tax burden," Kerry said in a statement.
The flap was prompted by an exchange between Bush and a supporter who asked during a town-hall meeting in Niceville, Fla., about Bush's position on legislation for a national sales tax.
"He's talking about getting rid of the current tax system and replacing it with a national sales tax," Bush told his audience. "It's an interesting idea. You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously."
Conservatives have pushed for the administration to do more to overhaul the tax code, with some calling for either a so-called "flat" income tax or some variation of a federal sales tax.
Bush and his senior aides have suggested that overhauling the tax code would be a second-term priority if the president is re-elected. And Bush said at the Florida meeting: "We're working to simplify the tax code."
But neither Bush nor his aides have been specific on what tax-code changes were under review, and never before suggested anything as radical as replacing the income tax with a federal sales tax.
"The president has always believed in lower taxes and a simpler, fairer tax code," White House spokesman Scott McClellan said. But, he added, "There's nothing more to announce at this time."
Later, two administration officials, who spoke on condition of anonymity, said Bush was not considering a national sales tax.
Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, told reporters in a conference call arranged by the Bush-Cheney campaign that he favored looking at "well-thought-out alternate tax structures" and that his tax-writing panel planned to do so.
"We have one of the more regressive tax structures in the world today that basically is a 19th century concept," he said.
But, he added, "We should get that revenue from people in the least destructive way possible."
House Speaker Dennis Hastert, R-Ill., in a just published book, called for replacing the current income tax system with either a national sales tax, a value added tax or a "flat" income tax. But he also said in a recent interview with The Associated Press that he didn't expect the Bush campaign to go along.
"I think that's a piece they don't want to bite off in the campaign. They have other things they want to talk about," Hastert said.
Kerry campaign officials discounted claims Bush wasn't really considering such a tax and suggested the question to Bush might have been planted.
"Questions like that are not out of the blue," said Kerry spokeswoman Stephanie Cutter, noting that only supporters of Bush had been invited to Tuesday's session.
Said White House spokesman Trent Duffy: "The president is always open to good ideas to make the tax code more simple and more fair. He (the president) was answering a specific question from a person who obviously feels very strongly about one approach."
In April 1993, President Clinton suggested he was weighing — but had not decided upon — proposing a national sales tax to help finance his health care program, noting that many business leaders supported such a tax.
Gene Sperling, one of Clinton's top economic advisers and now an adviser to Kerry, said he did not remember discussions over such a tax.
But, Sperling said, "Any way you cut it, a proposal like this will amount to a historic tax increase on middle-income families."
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