Since Republicans have been in control of both the White House and Congress for nigh on four years and passed three major tax bills in that time, Democrats need to take them to task for their shortcomings in this area, and 'judo flip' the issue by coming out with a sound, coherent platform that addresses them.
CYA mode on:
I have presented this only as a stimulus to discussion and to present a few of my own ideas.
Small business is the "engine of the economy," as Republicans like to remind us. How much, however, has been done to directly relieve tax pressures on small businesses in order to help them through their first few years? Not much that I can see.
The federal tax code should be amended to encourage the formation and expansion of small businesses; making the tax on corporate profits more progressive is a good start.
- Taxes on Low- and Middle-Income Earners
Regardless of the deceptive statistics used to sell Americans on Bush's tax cuts, they went proportionately to the uber-wealthy. Repeal of the tax cuts for the wealthiest Americans would do much to reduce the deficit.
An expansion of the EITC is also in order. The astoundingly low ceilings for childless filers ($11,230 single, $12,230 joint, with a maximum credit of $382) is rather disheartening. Raising the amount a childless filer can earn and still qualify, and the cap on the credit amount, as well as reducing the age at which a filer can qualify (25, if memory serves me correctly) would go far in providing for the economic well-being of a number of taxpayers (especially minorities, who are much more likely to earn the amounts under discussion).
- Social Security Tax Reform
As I have written about
previously, FICA is regressive, but easily fixed. By raising (or removing) the cap on taxable earnings and exempting an amount of income from taxation, it becomes much more equitable.
Such a reform would do double duty, as low- and middle-income earners would keep substantially more of what they earn, and their employers would spend less per employee, leading to small-business growth.
- Health Insurance Tax Credits
We all know that medical care in the US is expensive, and that employers pick up most of the tab for those who have insurance. Leaving specific remedies for this situation behind and only looking at the tax issue, Democrats should sieze, and expand upon, Gephardt's idea of tax credits for business spending on health insurance.
If this were expanded to include individual contributions to their health care costs and modelled loosely on the Hope Scholarship credit, medical insurance would become less of a liability for both employers and taxpayers.
- Expansion of Education Tax Credits
The Hope Scholarship and Lifetime Learning tax credits fall a bit short of their goal of placing an education within most every American's grasp.
The Hope Scholarship is capped at $1500 per year, and limited to two years. With the average college education costing upwards of $12,000 per year, this falls far short of the mark. Expanding both the amount and duration (to, say, $5,000 for four years) would begin to truly deliver on the promise of an education for all who desire it.
The Lifetime Learning Tax Credit does little better. Refunding only 20% of the cost of education, while helpful, is also woefully short of the mark. Raise the percentage, and persons working to put themselves through school would have a little more to go forward with.
- Simplification of the Tax Code
A perennial Republican issue, this is perhaps the one that will resonate the most with voters. "In four years, with three tax bills, the Republicans have only succeeded in making the federal tax code more complex, opaque, and loophole-ridden. Democrats will fix that."
By tackling the issue head-on, Democrats will place the Republicans on the defensive. Presenting a real tax bill designed to help working Americans will work. Juxtaposing such a plan against the failed four years of Republican control will make a large number of Americans stop and think.