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Thompson on Tax Reform



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Kathryn, I agreed with every word of that editorial lauding Thompson. His Social Security plan combines the best liberal and conservative proposals (although the conservative elements are politically risky). His immigration plan breaks free of the notion that our alternatives are mass deportation and amnesty. The two missing pieces of Thompson’s policy development have been health care–where McCain, Giuliani, and Romney have outlined reasonably good plans–and tax reform.

He has now told us what he wants to do on the latter. Thompson’s tax-reform plan makes Bush’s tax cuts permanent, abolishes the AMT and the estate taxes, and cuts corporate tax rates and taxes on business investment. He also adopts the Republican Study Committee’s plan to let taxpayers choose to file under a simplified tax system.

I see two possible problems with this plan. The first is that it would have to be coupled with a plan to restrain spending, or even to cut it, to avoid a large expansion of the deficit. The second is that, as presented, it shifts the tax burden onto parents. Indeed, it shifts it from corporations onto parents. If I were Mike Huckabee or Mitt Romney, I might have something to say about that.



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