Stumbling on Tax Reform

They gather around in Iowa and New Hampshire, but they’re not saying very much.

This Presidential season, the Democrat candidates as a group are failing to articulate any plan on taxes except raising them. Even Bill Clinton-style “triangulation” politics seem to have disappeared. It’s a sad day when former centrists like Joe Sen. Lieberman are playing the class warfare card and calling for new tax hikes on upper-income Americans.

On his current five-day tour, “Leading With Integrity,” Sen. Lieberman hit the stump by calling for tax increases on the wealthy and reductions on middle-income earners.

According to the Associated Press, Sen. Lieberman called the Bush tax cuts “class warfare” and said, “I’m proposing a cease-fire. By leading with integrity, we can restore fairness to the tax code and give some real help to struggling American families.”

Of course, Sen. Lieberman’s new idea of “integrity” is a tax hike. If Sen. Lieberman is interested in integrity, a more honest slogan for his proposal might be “Leading the Effort to Take Your Money.” Sen. Lieberman is not alone. All of the Democrats running for President want to repeal at least some of Bush’s tax cuts, and families earning more than $200,000 a year are in the center of the crosshairs. It’s just disappointing to see a Senator who has supported the idea of tax relief in the past engage in demagoguery targeting successful entrepreneurs and small businesses.

To be sure, CSE is strictly non-partisan. We work with Democrats and Republicans and Independents with a laser focus on our goal: passage of the CSE Freedom Agenda. Just like the landmark 1996 Welfare reform bill was passed with Democrat support, it’s going to take bipartisanship to create personal retirement accounts for Social Security and to pass fundamental tax reform and the rest of the CSE Freedom Agenda.

That’s all the more reason why the Democrat leadership’s current performance is so disappointing. The Presidential primary is the perfect opportunity for candidates like Joe Lieberman to articulate a bold new vision in support of freedom and opportunity, but instead all we are seeing is a defense of the crumbling entitlement state that L.B.J. built.

Here’s an idea we’ve tossed around before: make all Members of Congress calculate and file their own taxes. That would get things simplified in a hurry. Why do we accept it as normal that our tax code is so complicated that we must hire legal specialists to simply pay our taxes?

The lack of Democrat vision on taxes and the rest of the Freedom Agenda stands in stark contrast to President George W. Bush, who has offered bold, innovative proposals on taxes, Social Security, Medicare, school choice, tort reform, and welfare reform.

This problem goes beyond the Democrat primary. These same Democrat candidates are also blocking the Freedom Agenda in the U.S. Senate. Where are the Democrats like Jimmy Carter, who back in 1976 said, “Our Income Tax system is a disgrace to the human race”?

On many issues, today’s Democrat leaders are afraid of their party’s special interest groups: public employee unions, teacher’s unions, and trial lawyers. These groups are stifling any real debate.

President Carter knew the complicated tax code doesn’t help the poor. It doesn’t help educate kids, or help families save for retirement. The complicated tax code only stifles growth and retards opportunity. Complexity is the tool of the social engineers who want to control our lives, and of the special interest parasites who use the code for personal gain. Further, the complicated tax code wastes the minds and working lives of legions of accountants, auditors, and tax lawyers. Imagine how much better America would be if we could shift the billions spent in tax code manpower to wealth-producing activities? President Carter, for all his faults, was right on one thing, the tax code is a disgrace.

Average Americans know that the tax code is a chamber of horrors. Poll after poll shows broad support for making the code more simple and fair. Indeed, the real danger here is that Democrats will grab the language of tax reform to actually try to pass their tax increases. They’ll talk about reform but the end result will be more complexity and higher taxes. So, before the Democrat strategists reading this column get any bright ideas, let’s be very clear:

Tax increases on upper income taxpayers are not tax reform.

Tax reform means eliminating complexity and reducing marginal tax ratesfor all taxpayers.

Real tax reform can happen—but only if concerned citizens like you take action and force Congress to have an honest debate about tax reform.

Indeed, the tax cuts passed earlier this year are already sparking new growth and jobs creation. Jobless claims are at their lowest levels since February, and inflation remains subdued. The stock market is on the way up. To keep the recovery going, Congress needs to pass further tax relief, streamline the tax code, and make the Bush 2001 and 2003 tax cuts permanent.

Despite the tax code monstrosity sitting atop the American economy, for some reason, at the moment the Democrat Party can’t get it right on taxes. That’s too bad, because it’s really quite simple: tax relief and tax simplification work. At this critical hour, as the economy limps towards expansion, America needs the Democrat leadership to put aside the same old class warfare tax increases and come up with bold ideas for real tax code simplification and tax relief. We’re waiting!