A Tax Battle Brewing?

Paul Krugman has it right: Now that the Social Security privatization debate has all but died down—though admittedly a few dead-enders are still fighting—the Bush administration will likely focus on tax reform when Congress powers back up this fall. Expect similar tactics: lies, fudged numbers, and more scare stories about how the rich aren’t working hard enough because they have too little money, and the poor aren’t working hard enough because they have too much.

One possible talking point to watch out for: Bush will probably talk about how a “flat tax” will make the tax code simpler and more efficient. Michael Kinsley had a grand little column a few weeks ago on how the “flat tax” doesn’t, by itself, make the tax code any simpler. The tax code isn’t complex because some people have to multiply their income by 35 percent and others by 28 percent. It’s complex because calculating income is complex, and calculating deductions are complex, and corporate loopholes are complex, and a flat tax rate won’t solve any of that; all it offers is a tax cut for the top brackets and a tax hike for the bottom—which, granted, solves the “problem” mentioned above.