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Sunday, July 12, 2009

Liberals Coming Around on Flat Tax?

Some liberals are actually slowly changing their minds about the flat tax - or at least realizing that you can't have 1% of your tax base provide 50% of your revenues forever. From the WSJ via Wizbang:

...now many Democrats, including the [California} speaker, are realizing that what they need is a tax base that will provide steady funding for their programs. In other words, they need a tax base that doesn't count on a large slice of revenue from taxes on a relatively small number of wealthy residents who can flee the state or who are themselves vulnerable to losing a substantial portion of income in a recession.

Bloomberg believes the same is true in NYC:

"One percent of the households that file in this city pay something like 50 percent of the taxes. In the city, that's something like 40,000 people. If a handful left, any raise [tax increase] would make it revenue neutral," the billionaire mayor said on his weekly radio show. "The question is what's fair. If 1 percent are paying 50 percent of the taxes, you want to make it even more?

The problem is that I'm not convinced the top 1% will pay much less. I think that less wealthy people will pay a lot more. And at the federal level, forget about it - Obama and Pelosi are so clueless about what drives economic growth that I'm convinced no single tax cut will ever be passed for any class of people (although further "rebates," ie. welfare transfer/redistribution payments for non-taxpayers is definitely possible).