Today in Des Moines, Iowa Democratic presidential candidate John Edwards unveiled his tax plan. The campaign says that the Edwards plan is designed to reward, and to help regular families get ahead. “It’s time for us to put our economy back in line with our values,” said Edwards. “It’s time to end the president’s war on work. And it’s time to restore fairness to a tax code that has been driven badly out of whack by the wrongheaded rules of the Washington establishment – more wealth for the wealthy and more power for the powerful. In America, when the middle-class makes money from hard work they shouldn’t pay higher taxes than when the rich make money from money.”

Edwards’s plan would create three new tax breaks to reward the poor and middle class for saving. He also would increase the tax rate on wealthy Americans return on investments, and end special tax breaks for insiders. Edwards would raise the capital gains tax rate back up to the 28% it was at when Ronald Reagan signed it into law. He also would end the Bush tax cuts for those making over $200,000 a year, end the use of foreign tax havens, close the hedge fund and private equity loopholes in the tax code, and cap executive pensions.

“I still believe passionately in the American Dream because I’ve lived it myself,” said Edwards. “I came from a family with very little – my father had to borrow $50 to bring me home from the hospital. Now I want for no material thing. I know that we can fix the mess we are in. I know that we can replace Two Americas with One America. But let me tell you one thing – it’s not going to be easy and it’s going to take all of us together. Because the people with power aren’t going to give it up without a fight. And we can’t sit down with them and make a deal. We can’t triangulate our way to big change; we can’t compromise our way to big change – we need to lead the way to big change. And that starts with me being specific, clear and honest about what I’m going to do.”

He proposes to help elevate the tax burden on the middle class by allowing families to deposit all part or all of their child care tax credit into tax free savings accounts. He would also create what the campaign calls a Get Ahead Credit. This tax credit would match savings dollar for dollar up to $500. He would also exempt from taxes a family’s first $250 in interest, capital gains, and dividends. He would also expand the Child and Dependent Care Tax Credit to cover 50% of child care costs up to $5,000, and make this partially refundable to low income families. He would triple the Earned Income Tax Credit for 4 million adults without children, and cut the marriage penalty for 3 million families. He also would use work bonds to match the savings of low income workers up to $500 a year.

Edwards said that he is fighting for the people whose voices are ignored in Washington. “If we want to live in a moral and just and fair America – an America where everyone is equal, an America where everyone pays their fair share, an America that values hard work – if we want to live in this America, then I need you. I have decided what I’m going to do with the rest of my life. I’m going to fight every day for the millions of Americans whose voices are ignored by Washington. My question to you, and the question I would ask you to ask yourselves, is what are you going to do?” First off, congrats to John Edwards for at least offering a program with details. Unlike every other campaign in this race, Edwards hasn’t been shy with providing details or telling us exactly what he would do if elected.

One of the things I like about Edwards is that he understands the importance of saving. The ability to save would do more to help the lower and middle class people improve their lives than any big government program ever could. The problem is that we live in a consumer economy fueled by debt. Many people in the United States don’t save and think that being in debt is acceptable. Edwards has some fine ideas here, but how does one change the consumptive mindset of the American people? Edwards’ idea of increasing taxes on the rich is a fairly standard Democratic belief, but he is correct that the tax burden has shifted over the past 30 years to the middle and lower classes.

What people who advocate a flat tax don’t understand is that both Republicans and Democrats see the current tax system as a way of redistributing wealth in our society. Sure Republicans complain about the IRS, but the vast majority of them don’t advocate junking the current tax system. Each party uses the tax code to put their ideology into practice. I hate discussing tax policy because the discussion is never based on programs and funding levels. It is always based on ideology. John Edwards’ tax plan is also based on an ideology, and your impressions of this plan are probably based on whether or not you agree with his ideological beliefs. I think the Edwards plan is pretty good, but that may just be my own ideology talking.

Text of Edwards’ speech

Press release on his plan

Jason Easley is the editor of the politics zone at 411mania.com.  His news column The Political Universe appears on Tuesdays and Fridays at www.411mania.com/politics 

Jason can also be heard every Sunday at 7:00 pm (ET) as the host of The Political Universe Radio Show at http://www.blogtalkradio.com/thepoliticaluniverse
 
 

 

Be Sociable, Share!