The complexity of today's tax code is a consequence of countless deductions and exemptions aimed at promoting a variety of congressionally determined policy agendas. The result is federal law loaded with opportunities for avoiding taxes and exploiting loopholes at the expense of fellow Americans. Behind every loophole there is a lobbyist.
When President Reagan cut taxes in 1981, several good things happened. The economy grew, revenues increased, and jobs were created. It's hard to think of better medicine for our ailing economy than replicating successful reform of the tax code on an even greater scale. How do we do it? Flatten tax rates; simplify the code; and, shift the burden away from our families and small businesses.
And if a person had twice as much income as another, he or she would be taxed twice as much. Furthermore, a single rate tax structure would eliminate taxes on savings, capital gains and dividends.The flat tax targets income, but the rich don't make their money through salaries, they make it through investments. There's the loophole. The crisis in the subprime mortgage sector left thousands on the brink of foreclosure, but one hedge fund manager made over three billion dollars shorting the housing market. Under Burgess' flat tax proposal, he would not pay one cent of taxes on that money. According to Robert Reich, Clinton's former Secretary of Labor:
The 25 highest-paid hedge-fund managers are earning more than the CEOs of the largest 500 companies in the Standard and Poor's 500 combined. While CEO pay is outrageous, hedge-fund and private-equity pay is way beyond outrageous. Several of these fund managers are taking home more than a billion dollars a year.
Gingrich was particularly dismissive of the part of the Forbes plan that exempts interest and other unearned income from taxation while taxing wages and salaries at 17 percent. "That's nonsense," Gingrich said. "That's not going to happen."Gingrich suffered from a failure of imagination. He couldn't conceive that a policy so flagrantly biased toward the wealthy would ever be seriously considered in the public discourse. What a difference a decade makes.
“The Reagan-Bush years,” he declared, “have exalted private gain over public obligation, special interests over the common good, wealth and fame over work and family. The 1980s ushered in a Gilded Age of greed and selfishness, of irresponsibility and excess, and of neglect.”That was just a test drive. The current occupier of the oval office no longer even tries to hide the GOP's agenda. With loyal servants like Burgess to do his bidding, why bother?