A FOOLISH CONSISTENCY is the hobgoblin of little minds. So said Ralph Waldo Emerson back in 1841. Perhaps so. But when two major newspapers change their opinions 180 degrees without offering any acknowledgment of their earlier views or any explanation for the change, one has to wonder if there isn’t something foolish about inconsistency as well.
As it happens, the flat tax presents an opportunity to look at this question. In recent months the Washington Post and New York Times have reversed themselves on the issue. Both previously supported the flat tax; now both oppose it.
Back on April 15, 1982, the Washington Post thought the fiat tax was a great idea:
The ideal income tax would be a flat percentage of all income above an arbitrary threshold of, say, $ 10,000 per year. It would be simple, quick and easy. As for fairness, it would be no less fair than the present tangle of exemptions, deductions and credits that are currently producing not equity but a widespread public cynicism and hostility. The flat tax is the obvious remedy.
And lest anyone dismiss this as the work of a rogue editorial writer, another Post editorial on June 3, 1982, noted that the public “is thoroughly fed up with a tax system that is not only of baroque complexity, but also downright arbitrary in impact.” Moreover, the “progressivity of the current income tax is, in any event, bought at enormous price in inefficiency and unfairness.”
The solution, according to the Post, was “replacing the system with a low-rate tax on income — with few, if any, exclusions allowed.” This, the $ IPost said, “is an idea that, by promising efficiency, equity and simplicity, appeals to all parts of the political spectrum.”
Now skip ahead to January 19, 1996. If anything, people are even more frustrated with the complexity and ineffciency of the tax code, and there is even wider acceptance of the flat rate idea. But now the solution that the $ IPost found “obvious” 14 years ago has suddenly become “a flawed idea, less a serious tax proposal than a slogan in the name of which the advocates claim to be able to accomplish several contradictory things at once.”
The Washington Post of 1996 now attacks advocates who believe “a flat tax will lead simultaneously to greater simplicity and ‘fairness’ in the system.” It concludes that “a flat tax wouldn’t be an improvement.”
The New York Times underwent a similar metamorphosis. Back in 1982, the $ ITimes also thought a pure flat tax was a great idea. In a June 6, 1982, editorial the Times asked, “Who can respect an income tax system that allows many wealthy citizens to pay little or no tax yet claims close to half the marginal earnings of the middle class? Who can defend a tax code so complicated that even the most educated family needs a professional to decide how much it owes?”
The solution, according to the Times, was a fiat tax. “The most dramatic fresh start, without changing the total amount collected, would be a flat-rate tax levied on a greatly broadened income tax base.” Specifically, the Times$ N praised the fiat tax bills introduced by Sen. Jesse Helms and then- congressman Leon Panetta.
The New York Times maintained an interest in the flat tax. In fact, in a March 27, 1992, editorial the Times criticized former California governor Jerry Brown for proposing a watered-down fiat-tax proposal on the grounds that it was not flat enough. Here is the Times’s view in 1992:
The present tax code is riddied with wasteful contradictions and complexity. For example, profit from corporate investment is taxed twice — when earned by the corporation and again when distributed to shareholders. That powerfully dis courages savings and inves tment — the exact opposite of what the economy needs to grow.
The remedy is, in a word, integration, meshing pesonal and corporate codes so that the brunt of taxes falls on consumption, not saving. Tax reform should also simplify the code, making loopholes harder for Congress to disguise, and enact. And for reasons of elemental decency, tax reform shouldn’t come at the expense of the poor.
Remarkably, there is a reform that achieves all these objectives. Robert Hall and Alvin Rabushka, economists at the Hoover Institution, have proposed an integrated code that applies a single rate to both personal and corporate income. Their plan wipes away most deductions and exemptions, permitting a low tax rate of 19 percent.
The Times went on to praise the pure Hall-Rabushka proposal, which is the basis for the flat tax plans of both Steve Forbes and Congressman Dick Armey, and criticized Brown’s deviations from it. It concluded by calling the Hall-Rabushka plan “a superb idea.”
But today the Times sings a different tune. On January 18, 1996, the $ ITimes attacked the flat tax. “Flat taxes have a glaring fault,” the Times$ N opined. “They lower tax burdens on the richest families and raise them on many middle-class families.” Furthermore, the integration of corporate and individual taxes, which the Times praised in 1992 as necessary to increase saving and investment, “would shift taxes away from wealthy shareholders.” The Times concluded that tax reform was desirable, but not a “Forbes-style flat tax.”
One is tempted to conclude that the only difference between the “ideal” tax of 1982 or the “superb idea” of 1992 and the “flawed” tax of 1996 with “a glaring fault” is that in 1982, or even in 1992, no one thought there was any real chance of enacting a flat tax. By contrast, there seems to be serious discussion of the idea today, as shown by the wide support for the Forbes and Armey proposals. Apparently the Post and Times preferred the flat tax as a curiosity, a theoretical possibility, rather than a real tax system. Once they thought there was an actual chance of enacting a fiat tax, both of them turned against their earlier endorsements.
Bruce Bartlett is a senior fellow with the Dallas-based National Center for Policy Analysis.
