Stephen Colbert Cheap Joke Opens Way for Daily Kos Cheap Shot

The liberal Daily Kos makes a big deal today of a Colbert Report  interchange between Blue-Tie Stephen Colbert and Red-tie Stephen Colbert with this headline:  

Stephen Colbert destroys Romney’s tax plan with one simple question 

Here is the dialogue ending with the "simple question" and the laugh-getting answer.

BLUE-TIE STEPHEN: He’s promising a 20% tax cut for the top 1%.

RED-TIE STEPHEN: Ah, but he’s also promising to close their tax loopholes, so they’ll still pay the same amount.

BLUE-TIE STEPHEN: Then... why cut their taxes?

RED-TIE STEPHEN: I... don't know. (Deer in headlights look included.)

I know the very sharp Mr. Colbert knows the answer to this supposedly destructive question but just opted for a cheap laugh.  He is, after all, a comedian.  And of course the Daily Kos couldn't pass up the opportunity to treat Colbert as a sage and make Governor Romney appear, to the uninformed, foolish.  The final word from Kos is, 

"Amazing.  Stephen just laid it all out.  If Romney's simply going to close enough loopholes that the wealthy still pay the same amount, what's the point of doing all this anyway?  Ask your conservative friends for their responses, and see what happens!"

Of course part of the problem, even for Governor Romney, is that it is very difficult to come up with an answer short enough and cute enough to satisfy the limited attention spans and sound bite hunger of many voters.   But here, for my liberal and conservative friends, is a wordy, wonky, “truthy” answer in two parts.  

The first part is that in the interest of fairness, which will please Mr. Obama, cutting the rates while closing the loopholes will treat all those wealthy earners the same and limit their tax avoidance options.  The person now paying the high marginal tax on his Adjusted Gross Income without benefit of big mortgage interest or charitable contribution deductions will pay less, and the person with big deductions will pay more.  That is only fair.  And it gets the federal government out of the businesses of manipulating behavior and picking winners and losers. 

The second part has to do with what people are motivated to do with their earnings from this point forward.  A semi-permanent lower marginal rate on income will motivate private investments based on sound financials rather than encourage a focus on minimization of income taxes through avoidance of high marginal rates.  My October 6, 2011, posting, Tax Reform Now,Seinfeld Inspired,  explored this advantage more thoroughly.

Don’t miss the point that if these marginal rates are lowered and loopholes closed as Mr. Romney proposes, Mitt Romney, Warren Buffett, and Barack Obama will all have much higher tax bills since they normally have significant deductions for charitable contributions.  VP Joe Biden, on the other hand, will pay less because he dosn’t have any.  I'm sure Mr. Biden will appreciate anything we can do to help lower his tax bill, President Obama has indicated he can afford to pay a little more, and Mr. Buffett at least has indicated that he really wants to pay more.

And, it is of course just a dream, but if we could get the highest marginal rates down to about 20%, get rid of all deductions, exclusions, exemptions, and credits, and treat earned income, dividends, and capital gains, the same, Mr. Buffett and others with no “earned income” would begin paying some serious tax bills, 20% of Adjusted Gross Income rather than the current 15% of Adjusted Gross Income less deductions.

And the biggest unintended and congress-frustrating benefit of such changes would be that it would no longer be any business of the IRS whether we have big or small mortgages, whom we support with our donations, whether or not we are married, how many children we have, or how we get our income.  That would be one giant step forward for freedom in the USA.

I’m just disappointed that Mr. Colbert went for the cheap joke rather than answer the question. But of course he is not running for anything.

(And of course we forget or completely ignore the simple fact that presidents don't determine or write tax laws.  They can only sign or veto such legislation passed by Congress.)

Tweet Follow @dkw2020