Towards A Democratic Tax Policy

One problem that Democrats have is that we have allowed Republicans to control the tax debate in America. We have allowed Republicans to continue to press for irresponsible tax cuts without coming up with a tax policy that would actually help American middle class families without plunging America into debt. Part of the problem is that Democratic tax policy is often framed in terms that only those interested in fiscal policy can understand. Republicans use the message that "Democrats think they can spend your money better than you can." As a recent article we read points out, this is actually the basis of every Republican tax-cutting proposal. (Here is that article's link: http://www.thedemocraticstrategist.org/0609/warrena.php).

What Democrats need to do is develop a tax-plan that is aimed at the middle class and would still raise sufficient revenue to run the country without borrowing billions and billions of dollars. One Democratic senator who has done just that is Senator Ron Wyden of Oregon. Highlights of his tax plan, which he calls the Fair Flat Tax Plan of are:

• provides higher standard deductions for every individual
• ends tax provisions that prefer unearned income such as capital gains and dividends over wage and salary income, and
• provides an unprecedented, refundable 10 percent tax credit for every taxpayer’s state and local taxes – a direct benefit for the more than two-thirds of taxpayers who currently do not itemize their taxes.
• reduces the 1040 down to a single page

(This list is taken from his official website which can be visited here: http://wyden.senate.gov/)

Senator Wyden actually spoke in Cleveland and the City Club about his tax plan in April of this year. The text of his speech can be read here: http://wyden.senate.gov/media/speeches/2006/04142006_City_Club_on_taxes.html. What we like about Wyden's approach is that he isn't sitting around wringing his hands and whining about how voters don't really, really understand what the Republicans are doing. He is going out and devising his own tax plan and exposing that while Republicans say they are for the middle class, their policies actually favor the rich over the rest of us. He does this by using their rhetoric of "Flat Tax" but adds the essential element of fairness.

All of this is not to say that we think that every Democrat running for Federal office should rush out and endorse this plan. What we are saying is that every Democrat running for Federal office should think about a taxation policy that reduces U.S. debt, helps the middle class, and simplifies the tax code. Since 1980 we have been playing defense on the issue of taxation. A whole generation is enough time to learn how to play offense on taxation.
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