Count me as one who is skeptical of John Kerry’s position that soaking the rich with more income taxes is the way to relieve middle class tax rates and to reduce the federal government’s deficit. Similarly, I am not particularly sanguine about the prospects for income tax reform and simplification in a second Bush Administration. However, it is somewhat galling to listen to Mr. Kerry decry income tax “loopholes” for wealthy Americans while, at the same time, taking advantage of those loopholes personally.
In this Wall Street Journal op-ed, Stephen Moore of the Club for Growth takes dead aim at the hypocrisy of Senator Kerry’s position on the income tax:

According to the Kerrys’ own tax records, . . . the couple had a combined income of $6.8 million in income last year and paid $725,000 in income taxes. That means their effective tax rate was a whopping 12.8%.

Under the current tax system the middle class pays far more than the Kerry tax rate. In fact, the average federal tax rate — combined payroll and income tax — for a middle-class family is closer to 20% or more. George W. and Laura Bush, who had an income one-tenth of the Kerrys’, paid a tax rate of 30%.

Of course, there is delicious irony in the Kerry family tax-return data. Here is the man who finds clever ways to reduce his own tax liability while voting for higher taxes on the middle class dozens of times in his Senate career. He even voted against the Bush tax cut that saves each middle-class family about $1,000.
The Kerrys have unwittingly made the case for what George W. Bush says he wants to do: radically simplify and flatten out the tax code. Dick Armey and Steve Forbes have persuasively argued over the years that America should have a flat tax with a rate of 17% to 19%. John Kerry has consistently opposed a flat tax, because he says it would be a tax break for the rich. But the truth is with a 19% flat tax, some rich people with lavish tax shelters, like John Kerry, would pay more taxes. I calculate that the Kerrys would pay another $500,000 of taxes if we had a flat tax.

Meanwhile, Steven Pearlstein in this Washington Post op-ed takes a look at the current corporate tax bill in Congress and throws up his hands:

It remains a mystery why Congress feels such a need to reduce corporate tax burdens even further. Despite what you hear from politicians and the National Association of Manufacturers, there is precious little economic evidence linking reductions in corporate profit taxes to job creation. Struggling firms don’t have profits, while successful ones with ample cash flow are likely to base hiring decisions on whether the new employees will generate new profits.
This is largely a Republican bill reflecting the majority party’s tax-cutting philosophy and increasingly strong corporate ties. But it says something about the moral and intellectual bankruptcy of congressional Democrats — and their lack of political imagination — that they haven’t rallied behind a Senate filibuster of this legislative abomination. If, at a time of record federal budget deficits, a self-proclaimed “party of the people” can’t take a principled stand against the biggest corporate tax giveaway in a generation, maybe it doesn’t deserve to be the majority party.

And finally, check out Professor Maule’s analysis of the candidates’ statements in regard to taxation policy, a part of which follows:

Listening to these two candidates spar over taxes was unpleasant. They toss about sound-bite phrases but I would be shocked if they really understood the underlying issues.
Though each candidate tried to paint the other?s tax philosophy as bringing a significantly different approach to the table, neither one persuaded me that they get it. Both hold philosophies that complicate the code. Neither one addressed the flaws inherent in taxing capital gains and dividends at lower rates; the plans advocated by each candidate would continue to treat these types of income as less deserving of taxation than are wages.

Update (10/12-13/04): Trent, a reader of the blog, points us to this Kerry-Edwards Campaign press release from May of this year regarding Ms. Heinz-Kerry’s tax return, and Buster points us to another site that purports to refute Mr. Moore’s analysis.
The press release and the website analysis are both somewhat ambiguous because they make assertions that cannot be verified without reviewing the actual tax returns (or at least having an independent expert review them). However, Trent fairly points out that the Mrs. Heinz-Kerry paid taxes equal to a more reasonable 32% of their taxable income, and that Mr. Moore’s 12.8% rate appears to be based on total income, which includes non-taxable income. The other website’s analysis — i.e., that the Kerrys’ lower taxable income was purely the result of the Kerrys’ charitable donations — is not at all clear to me from the available information.
However, the fact remains that the Kerrys take advantage of loopholes in the tax laws by sheltering roughly half of their income in tax-exempt investment vehicles. Frankly, I see nothing wrong with this as the Kerrys are simply doing what our antiquated tax laws allow. Nevertheless, Mr. Kerry would be more credible to independent voters such as me if he would advocate reasonable income tax reform and simplification — an area in which the Bush Administration has failed miserably — rather than engaging in divisive demagoguery regarding tax loopholes while enjoying the benefits of those same loopholes.