Wednesday, August 11, 2004

Bush: Why Not Just Eliminate the Income Tax?

On the campaign trail today, Bush spoke positively of abolishing the income tax and the IRS and replacing both with a sales tax. In a forthcoming book, Speaker of the House Dennis Hastert says that eliminating the income tax will be the centerpiece of Bush's second term.

A sales tax is widely recognized as regressive; that is, it falls mostly on the poor rather than on the rich. This is because the poor spend a higher proportion of their income on retail goods. Replacing the income tax with a sales tax would represent a tax cut for the rich that would make the tax cuts of Bush's first term look like child's play. The simultaneous tax hike on the poor and middle class and reduced revenue for the government would be devastating.


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