Wednesday, October 07, 2015

Bobby Jindal's national tax hike

Bobby Jindal thinks poor people don't pay enough taxes.
Mr. Jindal’s plan seeks to compress the current seven tax brackets to three, with those in the lowest rung paying a 2% rate. It would also eliminate most deductions, including those that allow millions of Americans to pay nothing in federal income taxes.

Mr. Jindal takes a different tack on taxes than his GOP rivals, particularly those looking to shield more Americans from paying federal income taxes at all, including former Florida Gov. Jeb Bush and real-estate developer Donald Trump. Mr. Bush would nearly double the standard deduction and estimates under his plan that roughly 15 million additional Americans would “no longer bear any income-tax liability.”

Mr. Jindal’s proposal would eliminate the standard deduction and the $4,000 personal exemption. That means a family of four would pay taxes on at least $28,600 in income that is now protected from the Internal Revenue Service under the current tax code. Mr. Jindal proposes a nonrefundable tax credit that could replace some of these deductions for households with children under the age of 18, or people older than 65 who make less than $5,000. He didn’t offer specifics on how this might work.
See, this way we can get more people "rowing the boat." 
In the release announcing his plan, Mr. Jindal acknowledged it would be controversial for exposing lower-income Americans to taxation. “It re-establishes the idea that, in America, everyone is expected to help row the boat,” he said in the release. “Independence, not dependence, is the root of the American dream. It’s time we had the guts to say so in public.”
Note that is different from getting more people "pulling the wagon" in that it is a metaphor neither Bobby, nor his protege Scott Angelle, nor even former State Rep. David Duke has used before to make the same argument.  Note also, that Bobby's reason for wanting more people to row has absolutely nothing to do with getting the boat across the water before he deliberately sinks it.
Mr. Jindal estimates his changes would reduce the federal tax revenue by $9 trillion, or 22%, over 10 years. He also predicts the gross domestic product would grow at more than 4% a year, and that wages would grow at more than twice that pace. Mr. Jindal has said he plans extensive budget cuts.
It's interesting to see Jindal bring up this plan now.  Remember a few years ago he tried to do something similar to the tax structure in Louisiana. But his"tax swap" plan which would have repealed the state income tax in favor of higher sales taxes, was so unpopular, even with the conservative Louisiana Legislature, that he ended up "parking" it with no further action.

At the time, Mark Moseley wrote in The Lens that the whole exercise had really been about positioning for the 2016 race.
This is a priority for Jindal, not Louisiana. It’s a policy motivated by personal ambition and couched in talking points instead of sound economics. The state deserves a better, more informed debate. Not about a particular “plan,” per se, but about Jindal’s views on economics.

In short, Jindal-nomics conform to supply-side ideology, appeal to establishment Republican kingmakers and would allow Jindal to posture as a Bayou Reagan in advance of the 2016 presidential race. That’s what he wants, and if Tidmore is right, that’s what he’ll get.
The Chris Tidmore reference in that quote is regarding a column where Tidmore reported that Jindal was still determined to achieve an income tax repeal despite having set aside the "swap" plan. At the time, Moseley concluded that Jindal would need a win there in order to outflank his GOP opponents to the right on tax policy in Iowa.  Today it looks like Jindal is going for it anyway.  But this is even more blatant.

In the "tax swap" scenario Jindal was trying to sell a net tax increase on poor and middle class people behind the smokescreen of a "repealed income tax."  In this new plan, he's just coming out and saying, look, poor people are moochers, and I'm gonna make them pay by any means necessary. It's the same basic policy except a bit meaner in tone this time.  But when the tone is set by Donald Trump as the frontrunner for an entire summer, this is what happens.

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