The Mugger Of All Tax Reformers

is Charlie Rangel. Besides wanting to go back to the draft for military service (which would take away the freedom to choose, which is probably the purest form of military accountability to society, not to mention the devaluation of soldiers' lives because of coerced service), he wants to lower corporate taxes in the name of competition and fairness, but raise them on individuals ... in the name of _______ (fill in the blank, I have no clue):

No one thinks his plan has a chance of becoming law this year, but its beauty is as a signal of Democratic intentions for 2009. In proposing what would be the largest tax increase in history, Mr. Rangel is showing the world what he wants the tax code to look like if Democrats run the entire government. None of the Presidential candidates will admit this before November 2008, but give Mr. Rangel credit for having the courage of Hillary Clinton's convictions.

With one very revealing exception. Mr. Rangel does propose to cut the corporate tax rate, of all things, to 30.5% from 35% today. He'd "pay" for this by reducing business credits and deductions. This is revealing because it is a tacit admission that tax rates really do matter to investment choices.

Yet when it comes to individuals, Mr. Rangel seems to think that he can raise rates and no one will behave differently. Thus he proposes to raise taxes on business and the upper-middle class in order to reduce the Alternative Minimum Tax (AMT) that Democrats created to soak the rich but is now threatening to skewer the middle class.

But where Mr. Rangel really gets busy is with his plan for a long-term "revenue neutral" AMT fix. He wants to abolish the AMT permanently and greatly expand "refundable tax credits" for low income families, while adding a 4% income tax surcharge on anyone who makes more than $200,000 a year, or 4.6% if you make $500,000 ($250,000 for singles). Mr. Rangel also wants to raise the capital gains tax rate to 19.6% from 15% today, and raise taxes on dividends, business partnerships, and companies with foreign subsidiaries. Add it all up and you get new taxes of $1 trillion or more.

We sympathize a little with Mr. Rangel, whose bad luck has been to take over his tax chair just when the AMT is becoming the tax that ate the middle-class in the high-tax "blue" states of New York, California and New Jersey. Democrats are desperate to avoid blame for this, even as they've boxed themselves in with their "paygo" promise to offset every tax cut with a tax increase or entitlement spending cut.

Amid slow growth and a housing recession, this couldn't be a worse time to raise taxes on capital gains, dividends and small business. Democrats would be smarter to drop the tax increases and "paygo," and simply patch the AMT for another year. And if Mr. Rangel really wants to reform the tax code in 2009, he's going to have read up on what the Gipper accomplished. All he's proposed so far is a trillion-dollar bomb.

Serves us right. For the most part the academy teaches our students that the higher the tax the better, the media reports to our voters that the answer to failed government programs is to grow the old ones and make new ones, and we elect buffoonery, ...

Democracy = Idiocracy.