Kochs’ LIBRE Initiative Backs Regressive Flat Tax That Helps Kochs But Hurts Working Latinos

February 22, 2016

Daniel Garza, executive director of the the LIBRE Initiative — Charles and David Koch’s Latino-outreach front-group that works against the interests of Hispanic families — has appeared to endorse a flat tax, a highly regressive proposal that’s good for the Kochs but hurts the families that LIBRE claims to represent.

In a post on Medium, Garza argues, “Hispanics will never be able to lift themselves out of poverty or achieve prosperity if we’re forced to pay higher taxes every time our incomes grow.”

That sounds nice, but what Garza’s left unsaid there is that he similarly doesn’t think billionaires like the Koch brothers should be “forced to pay higher taxes” every time they make a few more millions — because, he claims, it “will be of no help to our community.”

Garza’s argument is — at best — questionable logic, because a flat tax is enormously regressive, conferring massive benefits on the wealthy few at the expense of working families, and on the backs of the Hispanics working “to lift themselves out of poverty or achieve prosperity” that Garza claims to be interested in helping.

Garza’s flat tax proposal is great for the Koch brothers and other billionaires in their donor network — but it doesn’t confer the same level of benefits on Hispanic working families, despite Garza’s argument to the contrary.

But what else is new. This is just LIBRE’s latest transparently political effort to advance the Kochs’ selfish agenda at the expense of the interests of the Latino community it otherwise claims to represent.


Background
:

Citizens For Tax Justice: A 20% Flat Tax System Would Result In “Enormous Tax Cuts For The Richest Five Percent Of Taxpayers” And “Tax Hikes For All Other Income Groups.” According to a Citizens for Tax Justice publication, “Since 1995, Senator Arlen Specter of Pennsylvania has introduced legislation to create a federal ‘flat tax’ in every session of Congress, including this session. […] We find that Senator Specter’s flat tax will result in: Enormous tax cuts for the richest five percent of taxpayers, including an average tax cut of $209,562 for the richest one percent in 2010. Tax hikes for all other income groups. The bottom 95 percent of taxpayers would pay an average of $2,887 more in federal taxes in 2010.” [Citizens for Tax Justice, 2/19/10]

The Center For American Progress Calculated That Under A 15% Flat Tax, A Teacher With $20,000 Of Taxable Income Would See A Tax Increase Of $450, While A Lawyer With $500,000 Of Taxable Income Would See A Tax Decrease Of Over $80,000. According to the Center for American Progress, “The fallacy of the claim that a flat tax promotes fairness is easily illustrated by a hypothetical in which the current progressive tax system, using the 2014 tax brackets, is replaced by a flat tax with a rate of 15 percent. A teacher with $20,000 of taxable income filing as single would have paid $2,550 under the current tax code compared to $3,000 under a 15 percent flat tax. Meanwhile, a lawyer with a taxable income of $500,000 would have paid $155,046 under the current system but only $75,000 under a 15 percent flat tax.” [Center for American Progress, 10/22/15]

Economic Policy Institute Research And Policy Director John Irons Wrote That A Flax Tax Would “Bring In Significantly Less Revenue Than The Current Tax Code.” According to an opinion by Economic Policy Institute research and policy director John Irons for U.S. News & World Report, “Because flat tax proposals lower rates at the top, and because the top is where an increasing share of income is being concentrated, they also tend to bring in significantly less revenue than the current tax code, resulting in higher deficits, fewer public investments, and pressure to cut programs like Social Security and Medicare.” [John Irons – U.S. News & World Report, 11/1/11]

Former Federal Reserve Vice Chairman Alan Blinder Wrote That Under A 23% Flat Tax, “Someone With $20 Million In Taxable Income” Would See A $2.4 Million Drop In Taxes From The Current Rate Structure. According to an opinion by former Federal Reserve vice chairman Alan Blinder for the Wall Street Journal, “For very high-income taxpayers, the lower tax bracket rates are virtually irrelevant—only the top rate really matters. Someone with $20 million in taxable income pays nearly $7 million in taxes under the current rate structure, with its 35% top rate. Replace that with a 23% flat tax, and the bill drops to just under $4.6 million. With a 9% tax (where in the world did I get that idea?), it’s below $1.8 million.” [Alan Blinder – Wall Street Journal, 11/14/11]

Paid for by American Bridge 21st Century Foundation