From
Yesterday (Wednesday) on CNN:
WOODRUFF: Well, one of the things you do talk about is middle- class tax relief, and yet just yesterday your Republican counterparts in the House talked about three different times -- kinds of middle- class tax cuts and extending those. Have they in a way taken that issue off the table because they have moved first on it?
PELOSI: No, they haven't.
In fact, they're a little disingenuous in what they propose because what they really want is their 23 percent national sales tax. And tomorrow -- today, we rolled out our positive agenda, the New Partnership For America's Future, and tomorrow we'll be pointing out some of the differences between Democrats and Republicans under the leadership of Charles Rangel. Our senior Democrat on the Ways and Means Committee will be telling the American people about their 23 percent national sales tax, which is very regressive and damaging to prosperity in our country.
So they can talk about any tax cuts they want right now. Their real agenda is to eliminate them all and just go for the 23 percent tax cut -- not tax cut, the sales tax. But we're today -- very delighted. We have consensus in the Democratic Party. Democrats are unified. They are focused. They have established their priorities around six core values to secure and strengthen the middle class, to protect our country, to build our prosperity, to expand opportunity for our children, and to make the future better for the next generation.
What's that, you say? You don't recall hearing about this National Sales Tax idea? Well, Bush was flying this sneaky little flag up the pole last August, before the RNC convention.
From a cached CNN story:
President says replacing current system with sales tax is an idea we should 'explore seriously.'
August 11, 2004: 8:38 AM EDT
NICEVILLE, Fla. (Reuters) - President Bush said Tuesday that abolishing the U.S. income tax system and replacing it with a national sales tax was an idea worth considering.
"It's an interesting idea," Bush told an "Ask President Bush" campaign forum here. "You know, I'm not exactly sure how big the national sales tax is going to have to be, but it's the kind of interesting idea that we ought to explore seriously."
Republican economists who speak regularly to the White House have said that the Bush campaign has been mulling the idea of an overhaul of the tax code as part of an agenda for a second term should Bush win reelection.
Some lawmakers have floated ideas of simplifying the tax code by putting in place a "flat" income tax rate or a national sales tax. But those ideas have so far not gained much traction in Congress.
Opponents say such a system would not be in the best interests of the poor and the middle class who would pay the same tax rate as the wealthy even though they have less disposable income.
Later, Bush's aides backed away from this, saying they had no plans for a National Sales Tax at this time, but the idea is all the rage with the Freepers and Grover Norquists out there, including many in the Congress.
Conservative columnist Bruce Bartlett at the Washingtom Times isn't fooled:
One could interpret Mr. Bush's comment as simple politeness toward one of his supporters. But I think it is revealing that, although the questioner referred to the proposal only by its bill number, Mr. Bush was clearly familiar with its specifics. Obviously, he has a good deal of knowledge about the national retail sales tax bill sponsored by Rep. John Linder, Georgia Republican.
Furthermore, Mr. Bush made reference at the rally to Rep. Jeff Miller, Florida Republican, suggesting he could "explain it all to us." Indeed, he could have. Mr. Miller is a cosponsor of H.R. 25, something Mr. Bush apparently knew.
My point is Mr. Bush certainly seems to know a lot about a rather obscure bill that has absolutely no support among reputable tax experts. I recently did a thorough review of the academic literature on this issue and could not find a single article in a peer-reviewed journal that did not reject the sales tax proposal as utterly unworkable.
As I explained in a recent column, the tax rate would have to be prohibitively high to replace all federal taxes. Its own supporters admit it would have to be 30 percent when compared to state sales taxes. And a new analysis by economist Bill Gale of the Brookings Institution estimates it would actually take a rate of 60.7 percent.
Why should we care about this? This is a great campaign issue, one that has sneaked under the radar, so far, perhaps because few on the Left have considered the possibility of using tax issues against George W. Bush.
This is an issue that resonates very strongly with people that like Bush's conservative lower-taxes message but aren't in the way-out Grover Norquist sphere. This is something that everybody can identify with, because in most states, we already pay a state sales tax for everything. It's one of the most regressive taxes imaginable. The windfall for the very rich at the expense of the poor and middle-class is mind-boggling. This is a very bad, very radical idea, that has no advantage except for the very wealthy and the ideologically twisted on the right.
You may think that this is so ridiculous that it's not worthy of that much attention. That's not the point. The point is that Republicans are vulnerable on this. They ran attack ads against Kerry all through last spring for his faint and unserious musings about a gasoline tax some twelve years ago.
Democrats are already using this against Republicans in some red states. Few here seem to realize this. It has gained traction in South Carolina and George congressional races.
Pelosi's statement heartened me. I've hoped this issue would get more coverage.