The final report of the Kemp commission — the tax reform panel appointed by Newt Gingrich and Bob Dole — was supposed to be unveiled in Washington last week with all three big shots present. But snow stranded Jack Kemp on the ski slopes of Vail, and so the event was held up, maybe until this week. So what’s the commission going to say?
It’s what it won’t say that’s more interesting. Kemp wanted to name a specific flat-tax rate that would be a starting point for future discussions and could be thought of as “the Kemp plan.” Dole and Gingrich wanted to avoid specifics, with both explicitly following the principle that it’s foolhardy to put forward a program ripe for attack before the intellectual groundwork has been laid for the general public. Dole, who’ll have to defend the commission’s report on the hustings, was more adamant on the matter than Gingrich.
The result? A supply-side document that names no specific rates anywhere but insists that the government should “tax income once at a single low rate, with a generous exemption.” This exemption would take the form of a floor below which no taxes would be paid. That would ensure the tax system would still be progressive; nobody poor would pay at the same rate as, say, Steve Forbes. Deductibility of payroll taxes is urged as an additional sweetener for working people. And the document urges a legislative guarantee long sought by conservative tax protesters: “These changes, once in place, should be sealed with a guarantee of long-term stability requiring a supermajority vote of the U.S. Congress to raise the tax rate.”
Kemp’s introduction to the report is called “Setting the Eagle Free,” and he uses it as an opportunity to make a wildly heterodox claim about the size and strength of the American economy: “An economic growth rate of 2.5 percent is unacceptable to the American people.” Take that, Alan Greenspan.
