Las Vegas Sun

March 29, 2024

Where I Stand: Dukakis and a flat tax for all

FORMER THREE-TERM Massachusetts Gov. Michael Dukakis wasn't elected to reside in the White House in 1988, but that defeat didn't end his life. He's still a thinker and, for several years, has been teaching in U.S. universities. Currently, he is a visiting professor at UCLA's School of Public Policy and Social Research.

During my eight years in office, I had the opportunity to serve with fellow governors Ronald Reagan, Jimmy Carter, Nelson Rockefeller, Mike Dukakis and Tom McCall among dozens of others. All of them helped contribute to my education, because I found their different ideas and methods of solving problems most interesting. Despite our disagreements on some issues, I seldom left their presence without feeling something had been learned by me and my staff.

Mike Dukakis, swimming against the tide of popularity President Reagan had created for his vice president, George Bush, helped bring about his own defeat with several campaign mistakes. Bush's support from Reagan and Dukakis' struggle to gain public attention resulted in some errors he probably wouldn't make if he were running again. Instead of seeking other public offices, Dukakis has become an effective professor, lecturing and writing for people who have educational backgrounds allowing them to understand and use words with more than two syllables.

A couple of weeks ago, a column written by Dukakis ran in the Los Angeles Times. It was about a subject that has been bounced around among thinkers during recent years and should be of interest to all Americans. When asked if I could use his column, he told me, "Go ahead. You can use it any way you see fit." Rather than tamper with his column, I'm printing it as it was published so you can make your own judgment.

By Michael Dukakis

Steve Forbes hoped to ride into the White House on a flat income tax with a low-earner exemption. He apparently had a lot of company, at least on the Republican side of the street.

Of course, when you look at it closely, the flat tax is nothing more than another attempt to give a huge tax break to wealthy taxpayers like Forbes. But it sounded good, at least when he first proposed it, and it transformed him, at least temporarily, into a serious challenger for the Republican nomination.

Suppose, however, that a candidate for the presidency ran on a plan for a flat tax with a high-earner exemption. We'd think he was out of his mind.

Yet that's exactly how the Social Security tax works. We pay a flat tax of 6.2 percent on every dollar we make, up to $62,700. All wages above that are tax-exempt.

The high-earner exemption is as regressive as it sounds. And it's taking a huge chunk out of the wages of average working Americans. A worker making $60,000 a year pays eight times the rate paid by someone pulling in a half-million a year and 80 times the rate paid by someone making $5 million a year. To put it another way: A $60,000 earner pays 6.2 percent on all her earnings; a $500,000 earner pays the 6.2 percent on the first $62,700, which is 0.78 percent of all of his earnings, and the earner of $5 million pays the same, which is 0.078 percent of his earnings.

It's bad enough that working middle-class Americans are feeling less and less secure. For those lucky enough to still have a job in these days of massive corporate downsizing, the Social Security tax is the unkindest cut of all.

In fact, more than half the people in this country pay more in Social Security taxes than they do in income taxes. And you can bet they aren't among the wealthiest 20 percent to whom virtually all income growth has gone since 1980.

What can we do about it? It's as simple as it is common sense. Get rid of the high-earner exemption, cut the Social Security tax rate and apply it to all earned income -- just what the flat-taxers say they want to do to the income tax.

If we made this one move, the Social Security flat-tax rate would decrease by 12 percent. Everyone earning less than $82,000 -- that's more than 97 percent of American workers -- would get a tax break. It wouldn't increase the federal deficit one dime. But it would eliminate the necessity for the kind of tax cut that budget negotiators are wrestling with, which would add billions to the deficit.

Lower taxes for the overwhelming majority of working Americans. Heightened fairness. A fiscally responsible tax cut for the middle class. These are the goals that all fair-minded Republicans and Democrats should be able to support.

Of course, people like Steve Forbes would have to pay the same rate as the rest of us. But wasn't that the principle behind the flat tax in the first place?

archive