AUG 1 - 15, 2004

VOL. 2 ISSUE 15

AUGUST 13, 2004 -  He's just floating the idea, they say.  He called it "interesting idea that we ought to explore seriously."  (see CNN MONEY article)

Those comments alone are enough to show that George Bush must be kept from having another term in guiding the US economy.

The idea he and his campaign are floating are replacing the national income tax with a sales tax.

Now this is the typical Bush/Limbaughian idea.  It is custom made for talk-radio/FOX News - there are a number of dishonest talking points that, if hammered away at and the other side of the debate not given voice, could make this sound appealing to the average Joe - while at the same time it is an absolutely destructive, horrible policy for America and virtually all Americans except the top 1 percent who own talk radio and FOX News.

Here are the basic facts.

Right-wing talk-radio and other media outlets exist to make the rich's case seem as if it is best for America and the average middle-class person - and ensure that arguments pointing out otherwise are not heard or dishonestly distorted.

With this tax plan, the selling points that America-destroying prostitutes Hannity, Limbaugh, etc. will push will be:

- "You won't have to pay income taxes anymore!"

- "The IRS will be eliminated!"

- "Now there will be no loopholes or deductions for rich people to exploit, so things will be fairer - everyone will pay the exact same tax rate."

- "If you earn more money, you don't pay more taxes - you can save all of it and get ahead."

These points sound pretty good, huh?  And that is why is some early on-line entirely unscientific polls, 65% of Americans are in favor of the idea.  Because while the idea hasn't been out there long, it is being sold like this on talk radio already.

Now here is the undisputable reality of what eliminating the income tax in favor of a sales tax would do.

- Require a sales tax on all your purchases of at least 30 percent.

The lowball figure being floated by Republicans is 25 percent - yes, that's their lowball figure.  Reality would be between 30 and 50 percent.  (see CNN MONEY article)  So picture having to pay 30 percent just in federal sales tax - on top of local sales tax - on every purchase you make.

- Entirely eliminate corporate taxes.

Those will have to be made up somehow, huh?

- Encourage people and companies to shop overseas.

No one else has even realized this part yet but it is simple:  if you shop overseas, you avoid paying this sales tax.  Bright idea for our economy, huh?

- Discourage people from spending.

Um, ever hear how 2/3 of our economy is American consumer spending, and remember how part of the excuse for Bush's tax cuts was to put money in our pockets so we would spend which would spur the economy.  Well, if you only pay taxes when you buy things, does that encourage you to buy or discourage.  Right, people won't want to spend to avoid paying the 30 percent tax (more like 37% with local sales taxes included.)  Unless, of course, they are shopping overseas.

- Virtually eliminate taxes for wealthy people while substantially raising taxes for everyone else.

You will no longer get a standard deduction, child deductions, mortgage deduction, etc, and will pay a 30% or higher rate on everything you spend, not 15% for the first part, etc.  And middle class people tend to spend most of what they make, so they will suddenly be paying a 30% federal tax rate with no standard, child, mortgage or any other deduction.  Yes, a massive tax increase on virtually all of us.

So you might ask at this point why on Earth is this being proposed.  There is no advantage at all for almost all of us.  In fact, it significantly raises taxes on almost every American.  So what is the advantage.

Well, look at the first part of the last highlight.

- Virtually eliminate taxes for wealthy people while substantially raising taxes for everyone else.

You only pay taxes on what you spend - and only what you spend in America.  So, if you make $40,000 and spend almost all, you pay 30 percent with no deductions.  But if you make $20 million, you only pay taxes on whatever you spend in the US.

So, say a person making $20 million a year spends $100,000 a year on food, gas, clothing, etc.  A person making $20 million dollars a year would only pay $30,000 in taxes.  You know what tax rate that is?  0.15 percent.  No, not 15 percent.  0.15 percent.  1.5 tenths of 1 percent technically, which, rounded off, is 0 percent.

Even if they spent $1 million dollars a year in America, you know what their tax rate would be?  1.5 percent.  That's right, even if a person making $20 million a year would spend $1 million of it here in America, he would only end up paying a 1.5 percent income tax rate, while the rest of us pay 30 percent.  Nice, huh?

But it gets even better.  For purchases such as clothing these wealthy people can simply buy their clothes, etc. overseas, and so truly only buy the essentials, such as gas and food here, making their tax rate even lower.

So, the people making $20 million dollars a year will pay 0 percent in taxes, while the rest of us are suddenly, instantly shot up to 30 percent with no exemptions, no standard deductions, no child tax credit, no mortgage deduction.

The best part of all:  President Bush likes to claim that his previous tax cuts put money in your pocket (even though reality is, as reported again today, they really benefit the almost entirely the very rich - see CNN article.)  Well, even what little bit the rest of us got in Bush's tax cuts... would be entirely eliminated if we switched to a sales tax.  Yes, the child credits, the lowered rates, the paltry bit he tossed at you so he could pretend he wasn't just handing the rich a horde would be gone, and you would be jacked up with, undeniably and unarguably, a massive tax hike to 30 percent, elimination of all deductions, etc.

The President is now already slightly backing away from making this a piece of his campaign agenda - because he realizes the horrible reality is hard to cover - but instead might, "call for a study, a commission, a blue ribbon panel on tax change."  (from CNN MONEY article)

This should terrify you.  If previously you thought the President truly wanted the best for America but simply was having a rough patch economically, all doubt is now erased.  The President absolutely has now made clear, by getting behind this plan, calling it "interesting" and "something to be considered" publicly at campaign rallies, that he clearly, simply just wants to make tax paying something only middle class and poor Americans do, increasing drastically the burden on them while virtually eliminating the portion wealthy people AND companies pay.

He sees this is a bit too obvious with this plan, so he will let talk radio try and sell the talking points a bit, but basically pull it off the table publicly.  Why?  Because if he gets a second term, he can pass it regardless of what people think, as he never has to run for re-election again.

Make no mistake - because the President has made no bones about it.  President Bush is out to entirely loot the nation's coffers, and he doesn't care if it drives me, you, and the nation into the ground.  As we reported previously, he is the houseguest/boyfriend who runs up your credit cards and trashes your life entirely without conscience (see this article,) he is the drug dealer who pretends to be your friend while taking all your cash and destroying your life.

And most clearly, he and Cheney and friends are corporate raiders.  As we laid out in this article a while back, all along their actions and policies have followed that of a hostile corporate takeover.  They saw lots of cash on hand (remember that surplus?), so they forced their way into taking over the nation, did as all corporate raiders do - handed out all the cash immediately to those who helped them takeover - then began seeing how else they could use the nation's assets to line their pockets - such as rolling back environmental regulations, using the military to create payout excuses and obtain oil, trying to drill in ANWAR, etc.  And in the end, as with all of these sort of corporate raids, the company is left a bankrupt skeleton of what it once was.  The raiders sell off the rest for what they can and move on.

There is no question that even considering switching from an income tax to a sales tax, being either dumb enough or evil enough to find it an, "interesting idea that we ought to explore seriously," as the President said about it days ago, shows that the massive debt, trade deficits, record high oil prices (which his buddies love,) and loss of good paying jobs doesn't phase the President.  Even more, not only doesn't the sad economic reality he has created lead him to come up with a new plan to try and make any of it better, but, instead, he is simply looking for ways to steal more cash for him and his friends.  He doesn't care that everyone else will be paying for it - in fact, he obviously wants that.

And beyond that, a question has been answered for the nation.  Many people believed him when he said he was for tax fairness, tax cuts for everyone, and sure rich people and companies get a bit more but that is because they pay more and if you give them money they invest and create jobs.  We pointed out that, no, unless you attach those tax rebates to specific job creation investment, giving people and companies money will lead to nothing but them having more Lexuses and CEO's getting bigger bonuses, as has been the case.  The CBO pointed out that, "Taxpayers whose incomes range from $51,500 to about $75,600 saw their share of federal tax payments increase," while, "the top 1 percent, with incomes averaging $1.2 million per year, will receive an average $78,460 tax cut this year."  (see CNN article)  Yet some still believed.

But now for those who bought the President's sales pitch, they can see it all clearly.  There is no question that the President simply wants to make it so rich people don't have to pay taxes, and he wants the rest of us to pay more so they don't have to.  His basic belief is that everyone should pay the same amount of taxes regardless of what they earn, that someone earning $40,000 should pay the same as someone earning $20,000,000, even though this means rich people paying 0 percent and everyone else paying 30 percent or higher.  That is what he considers fair.

This election is a final chump-check for America.

President Bush is making clear that if elected he will leave no penny unstolen from the nation's coffers, no couch cushion left unturned in search of yet more cash for him and his corporate raiders from an already massively, beyond all previous records, indebted nation.  Our very nation is on the line.  If America fails this chump check and re-elects George Bush, he is making plain he will send us into bankrupt disaster the way the former Soviet Union went (while the Soviet Union, due to his naivete, rebounds.)

This time it is clear the President is so lost in his hubris that he has gone too far.  No American can miss how flat out amoral his sales tax plan is, how horrible for all Americans, how horrible for the nation.  There is no question or debate.  The Bush/Limbaughians are so far off the deep end - and so open about it - that either a Kerry/Edwards landslide is on the way or America will vote to end itself as a viable nation.

We at M/I know America would never vote itself into oblivion.  And so we welcome the many soon-to-be former Bush/Limbaughians who now, finally, can not help but see that they have been duped by a truly amoral man who cares only about cash and not about America.