I was reading a post by Flexo over at Consumerism Commentary, that talked about the 2008 presidential candidates and tax policy.  Pretty much across the board, the candidates wanted to either write Bush’s tax cuts into law, or continue them ( lower taxes further ).  There were two that I found interesting though, as they raise interesting questions.

• Matt Romney wants to eliminate taxes on interest, capital gains, and dividends for taxpayers with an Adjusted Gross Income of less than $200,000
• Mike Huckabee wants to eliminate the income tax, and replace it with a federal 30% sales tax.  Every month, the government would mail out a check to each taxpayer to reimburse them for a portion of these taxes – roughly equal to what a poor person is expected to pay in taxes.  This will help keep poor folks from worsening their situation.  As it stands, they don’t pay much, if anything, in the way of income tax.

Romney’s idea is novel, and something that would appeal to me.  With no taxes on capital gains / dividends, I would be even more likely to invest, and more aggressive in doing so.  Even though capital gains taxes are just 15% currently, taking that to zero tremendously increases returns.  However, rich folks ( over $200k / year ) would say that they are being punished for making so much.  Folks like me would instead see it as a bonus for investing.  Double-edged sword, indeed.

Huckabee’s plan is, of course, the more radical.  Taxing people on what they buy / use is a totally different animal than the current “tax what you earn” system.  Folks who make a lot but spend little will make out like bandits.  Free-spending rich folks will take a beating, and I don’t have a problem with that.  Regular folks will be hit-or-miss.  If they do well financially, and spend within their means, then the outcome will be fine.  But overspenders will be hurting, and will have to learn quickly.

I don’t like high taxes

Who does, right?  But with out nation’s debt spiraling out of control, you have to wonder why in the world aren’t people clamoring for just that – higher taxes.  The candidates want to get elected, of course.  They can’t even think the words “raise taxes” until they’re elected.  It will be interesting to see, though, what tax policies actually get implemented by the next president.  I’m pretty sure they won’t involve cutting taxes though, without raising taxes in some other area.  A bankrupt country is not a good thing at all.