AEI Ideas: James Pethokoukis: 'Ben Carson's Flat Tax Plan Represents Many of The Least Helpful Impulses in GOP Tax Policy'

Source:Bloomberg News- 2016 long shot Republican presidential candidate Ben Carson.

"Ben Carson has belatedly — his polling numbers have sharply declined the past two months — put out a big tax cut plan. Carson would, according to the Tax Foundation, “replace the federal income tax code with a modified Hall-Rabushka-style flat tax of 14.9 percent.” But let me clarify: For some people, it would be a big tax cut plan. The top 10% of households. For the bottom 90 percent, it would actually be a tax hike. As the WSJ’s Richard Rubin notes:

Poor households, which now get net refunds from the income tax system because of the child tax credit and earned-income tax credit, would no longer get those benefits. And the top 1% of households, which get a much larger share of their money from investments, would no longer pay any taxes on that portion of their income.

So Carson would cut taxes — on a static basis — by a massive $5.6 trillion. Yet most people would still pay more in taxes. Just let that sink in a moment. Go ahead, take two.

Now the Carson plan also includes a novel $100 per citizen minimum tax. (Skin in the game!) Here is my AEI colleague Ramesh Ponnuru on that neat little feature:

Carson justifies this minimum tax by saying it treats everyone in America as a “citizen owner” of the government. I don’t see how someone who gets $10,000 in federal benefits is in any significant way more of a “citizen owner” of his government if he pays a nominal $100 tax than if he doesn’t. ,,, Carson may be alluding to the political case many conservatives make for this kind of reform. On this argument, everyone needs to pay some income tax so that they understand that big government costs them money and so that they then vote in accordance with that understanding.

During his own presidential campaign, Bobby Jindal made this argument, although his plan raised taxes “only” on the bottom 40 percent of filers.

It seems to me that the assumptions about voter psychology behind this argument have to be that: a) many people vote based in large part on a calculation of the benefits they get and the taxes they pay; b) many of these calculating voters distinguish between payroll and income taxes, not counting the former toward their calculation; c) many of these calculating voters would not subtract the $100 from their benefits and see that they are still net “takers” from the federal government; and d) many of these calculating voters will decide to suspend their usual method of determining their vote for this presidential election, and vote for a candidate who is promising to raise their taxes and cut their benefits. These assumptions, in conjunction, seem unlikely.

I mean, I would imagine Carson is putting forward a policy that he thinks represents both sound economics and has some basic appeal to voters. But I am not sure telling someone that you are going to a) immediately lower their after-tax income in exchange for b) a future higher income based on theoretical economic models that c) suggest higher GDP growth by slashing high-end tax rates … well, I am not sure that sells. Oh, and even if you assume the higher GDP growth, the plan still loses $2.5 trillion. That Carson would offer such a plan — one that represents many of the least helpful impulses in GOP tax policy — certainly suggests an interesting take on the GOP voting base."

Source:AEI Ideas

"Chris Wallace tells Ben Carson: The rich 'make out like bandits' under your tax plan" 

Source:Raw Story- 2016 Republican Party presidential candidate Ben Carson, being interviewed by Fox News's Chris Wallace.

From Raw Story

During really the last six years or so of the tax cut and deficit reduction debate in Washington, people who call themselves Conservative Republicans, have argued that they wouldn’t support a tax increase, or a tax hike under any circumstances. 

The so-called fiscal cliff and the extension of the Bush tax cuts in late 2012 was part of the current Republican Party debate on tax policy. However, Representative Michele Bachmann (Republican, Minnesota) when she ran for president in 2011, (her campaign didn’t make it to 2012, or she ran for president in a non-presidential year) argued for increasing taxes on low-income workers. Adding an income tax to their payroll taxes. 

Ben Carson and others, now support a 15% flat tax that would be a fifty-percent tax increase on lower working class workers who currently pay 10% in federal income taxes before refunds and so-forth.

If you’re truly against tax hikes at any point, then you’re against any flat tax that raises taxes on anyone. Every flat tax that has ever been proposed has been both a lower and middle-income tax hike. I have a hard time taking anyone seriously who call them self even a fiscal, or economic conservative, when they support a flat tax. Because they’re supporting a lower and middle-income tax increase, but also on the people who American economy depends on the most to drive economic growth. 

You pass a lower-income tax on people and they’ll stop working and become completely dependent on public assistance, because they can’t afford your tax increase. We need to encourage these people to not only work, but further their education so they can get a good job and no longer be low-income. Not discourage them to work at all.