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Tax Cuts Vs. Tax Reform


Beyond Iraq and national security (which aren't looking quite as good as they used to), Republicans are hoping tax cuts and the inability of Democrats to politically counter them will carry them through the 2004 election. (Talking points 1, 2 and 3 from the RNC: "Democrats want to raise your taxes!") But will that approach really work?


David Broder, who normally doesn’t stick his neck out too far, thinks it might not. He cites a just-released Greenberg Quinlan Rosner poll that found the factor bothering people the most about taxes was not the large amount of money they pay (14 percent). Instead, the complexity of the tax system (31 percent) and, especially, the feeling that the wealthy and corporations don’t pay their fair share (46 percent) bothered people much more.


That, of course, suggests that simply opposing GOP tax cuts, or proposing to roll them back, does not exhaust possible Democratic approaches to the tax issue. Instead, perhaps it is time to reconsider the issue of tax reform, where Democrats can build on the initial advantages they have over the GOP on making the tax system more fair (12 points), reducing the tax burden on middle class and working families (11 points) and closing tax loopholes and tax shelters (8 points).


In this poll, the two proposals most strongly favored by the public for reforming the tax system also seem like Democratic naturals: closing the tax loophole that allows corporations to create off-shore tax havens (57 percent strongly favor) and changing the Social Security system so that everybody pays into social security on all their income (55 percent strongly favor).


Note that these proposals receive significantly more support than either a standard Republican proposal to make tax cuts passed over the last two years permanent (41 percent strongly favor) or a standard Democratic proposal to cancel recently passed tax cuts for the top 1 percent and invest that money in education, homeland security and Social Security (42 percent strongly favor). And pretty much every proposal finishes way ahead of a Steve Forbes style flat tax proposal (19 percent strongly favor).


Maybe it’s time for Democrats to revisit the tax reform issue and stop playing on the GOP-tilted tax cut terrain.