Monday, February 23, 2009

Pro-Cyclical Conaway Supports Fair Tax Bill

Representative Mike Conaway (R-TX) signed on as cosponsor of the Fair Tax Act of 2009. The bill is described as:

To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.

I find it odd that CPA Conaway would adopt a pro-cyclical tax plan. As the economy booms or busts, the federal cash window could swing wildly.

Mark to market accounting is criticized for being pro-cyclical. When assets increased in value, mark to market accounting primed the leverage pump. It fueled additional borrowing.

So what's the underlying logic to stopping mark to market accounting and dropping income. capital gains, and carried interest in favor of a national sales tax? Both plans favor robber barons, corporations and the wealthy.

Republicans aren't the party of no, they're the party of greed. Democrats conducted a fine imitation the last two decades. The suck up to corporations and the wealthy continues. America races to the lowest common denominator on worker pay/benefits and taxes.