When it comes to the tax code, we all hate it. Its either the complexity of the code itself, the amount you must pay, or both that will rally every American to that cause. But as much as I like the idea of a flat tax (or national consumption tax) I don’t think our society is ready to accept it. It has become the American way for the lower class to not pay taxes and this is not the time to talk about changing that.
So Tim Pawlenty is coming out with a very reasonable proposal that I think could be the grounds for a good strong and successful campaign. Pawlenty is going to propose a 3 tiered tax bracket with the bottom one not paying any (as they are now) the middle at 10% and the top at 25%. He will also cut the punitive corporate rate from 35% to 15% while eliminating “special interest handouts, carve-outs,subsidies, and loopholes that should be eliminated”. Now that second part is key to selling this idea to the public. No one likes the “special handouts and loopholes” that some corporations enjoy while others don’t. This idea will sell to your average joe especially if Pawlenty can demonstrate that the revenues gained by eliminating the loopholes will offset the tax rate reduction. This will also blunt the Obama charge that he is just trying to make corporate America rich at the expense of the middle class if he can fire back that “no, I”m eliminating special interests corporations from being able to buy tax deductions from washington lawmakers, remember the kind of thing you promised to end”.
I think this is going to be a very smartly worded proposal with plenty of room in between in which to negotiate on, but the most important aspect is that he can make the political argument to the voters and I think it has a strong chance to resonate.