Economy, Regs, & Taxes

Jindal Wants Everybody to Have 'Skin in the Game'

The governor's tax reform plan starts with a simple premise.

Nate Jackson · Oct. 8, 2015
Photo courtesy of Gage Skidmore, Flickr

Louisiana Gov. Bobby Jindal is lagging in the presidential polls but he’s never out of ideas. He unveiled a tax reform proposal Wednesday with a simple goal: “Everybody has to have some skin in the game.”

As Jindal notes, “If we have generations of Americans who never pay any taxes, it will be very easy for them to turn a blind eye to absurd government spending and to continue to allow our government to bankrupt our nation.”

That’s certainly a stark contrast to Donald Trump’s plan to have even fewer Americans pay taxes. The natural attack — from both Left and Right — is that Jindal wants to raise taxes on the poor.

From a pure math perspective, that is correct — the nearly half of all Americans who don’t pay any income tax would, under Jindal’s plan, pay 2%. But he explained why that premise is good: “My plan only asks 2% from the bottom bracket, but that may be the most important 2% in the whole plan. Every citizen needs to help row the boat, even if only a little.”

Of the other details, Terry Jones writes at Investor’s Business Daily, “He cuts the number of income-tax brackets from seven to three, and eliminates the corporate tax, estate tax and alternative minimum tax. The top rate would be 25%, [the second at 10%], and the home mortgage and charitable deductions would remain in place. And he would let families deduct their medical insurance costs.”

The leftist ThinkProgress called Jindal’s plan a “right-wing nightmare,” but the true nightmare is the constant class warfare waged by Democrats. They incessantly harp about the wealthy not paying “their fair share” when the top 1% currently earns 17% of all income and pays 46% of all taxes. And that share is only rising.

Still, there are two important caveats here. First, all low-income, working Americans pay the payroll tax and thus feel the cost of government, though thanks to the fiction created by Franklin D. Roosevelt most people consider that money as being put away for their retirement. As National Review’s Ramesh Ponnuru once put it, “All federal taxes go to the federal government, and all federal spending comes from it: The rest is accounting, and accounting tricks. People who pay payroll taxes are funding the federal government, and conservatives who deny it are falling for a trap FDR set for them.”

Second, not all net beneficiaries of government redistribution philosophically support that redistribution. In other words, there are plenty of limited government conservatives who fall on hard times and rely on the safety net. And, conversely, making everyone pay 2% in taxes isn’t going to suddenly make Republicans out of inner-city Democrats. It’s also bound to be unpopular among those who would now pay a little, and we don’t think this is going to push Jindal very far up in the polls.

On a final note, federal spending is the flip side of the tax-reform coin, and Jindal promises to slash the budget to accompany his plan to reduce revenue by $9 trillion over 10 years. As Jindal put it: “The only way to shrink the size and influence of Washington is to starve it.”

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