Question of the day : Do you trust any politician that says they want to simplify our tax code? It wouldn’t be so complicated in the first place if it weren’t for….you guessed it, politicians. This isn’t a liberal/conservative issue, it’s about the way our political process is designed to keep our representatives obliged to give their campaign contributors “a seat at the table”.

Let’s say for a moment that Bush and his allies were actually able to junk the tax code completely and replace it with a flat tax and a national sales tax. How long do you think that would last before the first tax deductions start showing up? Within months, you’d see favored industries get around the sales tax as a way to “create jobs” or a tax credit for those with higher-incomes to “invest” in some sort of shady education or medical account. With the floodgates open, we’d be on the slipperly slope the the same complicated system that they’re decrying now.

Then again, that’s probably the reason they’d give for backing off their plans for a complete overhaul of the tax code to something more gradual (via Kevin Drum) :

The Bush administration is eyeing an overhaul of the tax code that would drastically cut, if not eliminate, taxes on savings and investment, but it is unlikely to try to replace the existing tax code with a single flat income tax rate or a national sales tax, according to several sources familiar with ongoing tax deliberations.

During his reelection campaign, President Bush piqued interest among conservatives and liberals alike when he said replacing the income tax with a national sales tax was “an interesting idea.” Just after the election he signaled that tax policy would be a centerpiece of his domestic agenda, reiterating his pledge to name a bipartisan panel to draft a fundamental tax reform proposal. That sent conservatives scurrying into either the flat tax or sales tax camp to muster political momentum.

But before the tax panel is even named, administration officials have begun dialing back expectations that they will move to scrap the current graduated income tax for another system.

Instead the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps intended to simplify the system and encourage economic growth, according to several people who are advising the White House or are familiar with the deliberations.

The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said.

“Revenue-neutral”…well, that’s one way to put it. I think a more accure description would be “Robin Hood-in-reverse”, since that’s what we’re really looking at here. I doubt you’d find many in the middle class who would see this as a revenue-neutral proposal after the tax hikes and potential loss of heathcare make it much harder for them to make ends meet.

How long will it take for us to find a leader who will embrace fiscal policies that respect work over wealth?