Forbes placed second in the Republican party's Iowa caucuses with 30 percent of the vote, mainly in response to his proposal to eliminate the Internal Revenue Service, tossing out the nation's multimillion-word tax code, and replacing federal income taxes with a flat tax of 17 cents on the dollar of income.
While those with the most wealth would get the biggest tax break from such a proposal, many workers and working farmers are attracted to the idea of simplifying the onerous tax system and getting rid of its complex rules, regulations, and forms.
Forbes points out, for example, that under his flat tax proposal a family of four would owe no federal income tax on their first $36,000 in income. Anything earned above that would be taxed at the 17 percent rate.
The tax code with its esoteric rules, interpretations, and exceptions to the rules is so obtuse that it makes the filing of taxes a massive headache if not virtually impossible for many working people. Millions are forced to seek out and pay a professional to prepare the tax forms. The Wall Street Journal in a January 26 editorial evaluating the Iowa caucus vote pointed to the strong desire to deal with taxes as the "one huge issue squarely before the American people." In Iowa, the Journal continued, "one in four GOP caucus voters cited taxes as the number one issue.... Steve Forbes, who put the tax issue on the map four years ago and is routinely mocked by the media for his wonkish devotion to the subject, actually carried these voters, 55-38."
Forbes, who finances his presidential campaigns with pocket money from his fortune, demagogically pitches his plan as part of the fight against government corruption. "One of the biggest deadweight costs imposed on America today is the federal income tax code. It is the biggest source of power and corruption," he stated in a May 1997 speech to the Cato Institute. "If we liberate the American people from the current tax system, we'll have a higher standard of living and the only losers will be those who have a corrupt interest in preserving the status quo."
The Democratic and Republican party politicians pitch their tax cut schemes as steps to lift the tax burden off the backs of the poor and working families. However, they mostly are aimed at granting huge tax breaks to the rich. In fact, the various tax "reforms" instituted by capitalist politicians have enabled the wealthiest families to increase the amount of declared income they keep from 30 cents on the dollar in 1980 to 60 cents today. This of course, doesn't include the various tax loopholes and investment tax shelters available to the ruling rich.
The current plans being circulated by Republican presidential candidates George W. Bush and John McCain fit into this pattern. According to the research group Citizens for Tax Justice, 5 percent of the tax cuts under the McCain proposal would go to the bottom 60 percent of the population. Under the Bush plan, the number would be about 11 percent.
Nevertheless, the flat tax proposal with its projected aim of simplifying and overhauling the current tax system has a real appeal among working people who face a multitude of taxes on their income and various sales transactions. In Seattle last fall, voters approved a ballot measure that abolished the state's 2.2 percent annual car tax and replaced it with a flat $30 fee. It also required future vehicle tax or fee increases to have voter approval.
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