Can We Talk About Taxes Now?
This column was written by Deroy Murdock.
As a cross subliminally looms behind former governor Mike Huckabee in his now famous TV ad, a question occurs: Is this Republican primary about rendering unto God the things that are God's, or rendering unto Caesar the things which are Caesar's? Whether one believes Jesus of Nazareth was a highly influential philosopher or the son of God, nobody knows if the Second Coming (or the First, according to Judaism) is scheduled for 2008, 3008, or another date.
What is metaphysically certain is next month's 94th Coming of the IRS's 1040 Form, straight to 135 million U.S. taxpayers.
Would America's presidential candidates please address this?
The God-O-Rama that the Republican presidential campaign has become has eclipsed the GOP's signature issue: Taxes.
Assuming life still matters here on Earth, not just in the hereafter, it might be useful before balloting begins to evaluate the top three GOP candidates and their executive tax records.
"There's a lot of support for a tax at the wholesale level for tobacco. And that's fine with me," former governor Huckabee reassured state legislators in 2003. "Others have suggested a surcharge on the income tax. That's acceptable. I'm fine with that. Others had suggested perhaps a sales tax. That's fine. Yet others have suggested a hybrid that would collect some monies from any one or a combination of those various ideas and, if that's the plan that the House and Senate agree upon, then you will have nothing but my profound thanks."
Thanks to Huckabee's hikes on sales, gasoline, cigarette, and other levies, Arkansas's average tax burden (revenue as a proportion of personal income) expanded 47 percent on his watch. Thus, one wonders how hard President Huckabee would push his proposal to replace today's income tax with the "FAIR" federal sales tax.
"Of the 30 states to raise fees this year, only nine are bringing in $100 million or more from those fee hikes," the Boston Globe's Rick Klein wrote July 24, 2003. "Massachusetts reported $501.5 million in fee hikes." As the Lowell Sun explained that February 28, "Romney's fiscal 2004 budget calls for increasing 57 fees and creating 33 new ones" that "would hit a broad spectrum of people, including the blind, mentally retarded, veterans, drivers, hunters, lawyers, boaters, skaters, inmates, developers, aircraft owners, and golfers." Romney raised fees on IDs for blind people, deed registrations, driving permits, marriage licenses, and more.
Romney also sought revenue by closing $283 million in "tax loopholes." Put another way, he slipped nooses around previously untaxed activities. This included retroactive new taxes on incomes, sales revenue, severance pay, and nonqualified pensions for individuals who work or trade in Massachusetts but live elsewhere, such as New Hampshire. In their first year alone, these new taxes cost out-of-state residents some $36 million.
Romney did arrange a two-day, tax-free shopping holiday, property-tax relief for seniors, and accelerated a $275 million capital-gains tax rebate.
Romney also tried to cut the state income tax from 5.3 percent to 5, but that effort foundered. His health-insurance mandate, however, has had a lasting effect. As a Massachusetts state website warns: "If you do not have health insurance, you will face a stiff tax penalty." Next year's fine will be $219 for individuals and $295 per uninsured worker at companies with at least 11 employees. Interestingly, Romney did not increase the co-pay for subsidized abortions, still just $50.
Under Romney, the Tax Foundation's ranking of Massachusetts's business friendliness slid from 26th to 37th in America. Meanwhile, Massachusetts's overall tax burden swelled 10.8 percent, congruent with Romney's "C" on Cato's gubernatorial report card.
Giuliani reduced taxes $9.8 billion, lowering Gotham's overall tax burden 17 percent. He did not sign one tax cut, then move on. Instead, he curbed taxes 23 times throughout his tenure, slashing levies on wages, business income, hotel rooms, and more. Proving that tax cuts are pro-family, a mom and dad making $50,000 saw their taxes fall 23.7 percent, freeing funds to nurture their two children. Giuliani also curbed the marriage penalty for filing couples. Asked if he planned to hike taxes after September 11, Giuliani slammed this as "a dumb, stupid, idiotic, and moronic thing to do."
Giuliani wants to make President Bush's tax cuts permanent, "give the death tax the death penalty," and cut the corporate tax from 35 percent to 25. Among major economies, only Japan's corporate tax is higher. This dramatically would increase America's global competitiveness.
Giuliani recently proposed an optional, one-page tax form. "O.K.," he admitted. "The print may be a little small." Not bad, but he should advocate an optional, flat tax. Americans who like the 67,204-page tax code can keep it. Others may volunteer for, say, a 17 percent flat tax. Telling New Hampshire voters, "It's your tax. It's your choice" likely would buoy Giuliani's stock among the Granite State's "Live Free or Die" electorate.
As voters learn that Huckabee -- for all his poise and piety -- rarely met a tax he didn't like, and Romney rarely met a fee he didn't hike, Republicans eager for the GOP to revitalize its limited government, low-tax roots may elevate Rudolph W. Giuliani to supply-sider in chief.
By Deroy Murdock
Reprinted with permission from National Review Online