Kanjorski: "Barletta-Supported Flat Tax Is Not a Fair Tax for Northeastern Pennsylvania"

WILKES-BARRE – In Monday's Scranton Times-Tribune, Hazleton Mayor Lou Barletta openly stated his support for a flat tax. A flax tax plan would lower the income taxes of the wealthiest Americans, while increasing income taxes on working middle class families. The Barletta-supported proposal would also decrease home values at a time when most Americans have seen their home values plummet because of the subprime mortgage crisis.

"How can Republicans like Lou Barletta ask middle class, Northeastern Pennsylvanians to take a hit on their home values so the wealthy can get a tax cut?" asked Congressman Paul E. Kanjorski. "Barletta, like fellow Republicans Mike Huckabee, Sam Brownback and Steve Forbes, love the flat tax. It is another way Republicans try to package a tax cut for the wealthy and sell it as something that's good for everyone. But just like George W. Bush did when he pushed his tax breaks, Barletta and these Republicans don't tell you how the middle class pays for this upper class tax break."

A flat tax would also make it impossible to give healthcare tax credits – but amazingly, Barletta has promised to do both.. On October 13, Barletta told the Pocono Record:

"I would like to see individual tax credits given to citizens, much like we do with businesses, and allow them to use these tax credits to pay their premiums on their health insurances."

Congressman Kanjorski said about the contradiction: "Part of the idea with the flat tax is it brings to an end the practice of tax credits for your home, charitable contributions and healthcare. You can't have it both ways. Right now, Lou Barletta either has no tax policy or no way to pay for healthcare."

A flat tax maintains a constant rate for all taxpayers, rather than our current, fair tax system which is based on income. Under the current system those making more money pay the highest taxes, and those with lower incomes pay less in taxes. Instead, a flat tax, taxes all Americans on the same level. The new rate is lower than what wealthy Americans are currently taxed, but higher than the rate middle class Americans have been taxed at.

Additionally, a flat tax refrains from taxing income from investments, which mostly benefits wealthier Americans leaving those less well off to pick up the tab. Under a flat tax, a retired billionaire living off the interest on his invested income would not have to pay any taxes, where as the struggling plumber still would.

Finally, a flat tax would immediately hurt homeowners, who are already feeling pain from the housing and credit crisis, because the value of their homes will fall. A flat tax based on income offers no tax credits and no deductions for specific items, such as interest on home mortgages and contributions to charities that exist in our current tax system. A flat tax would also end tax-free contributions to many retirement accounts, including 401Ks and IRAs.

"At a time when we should be creating incentives for people to save and protecting the value of their homes, this plan would kill it. Between his plans to privatize Social Security and support for a flat tax, I don't know how anyone would ever be able to retire in Lou Barletta's America," Kanjorski said.

Speaking before the Joint Economic Committee, Robert S. McIntyre, Director of the Citizens for Tax Justice stated, "There is little or no disagreement among serious analysts that replacing the current, progressive income tax with a flat-rate tax would dramatically shift the tax burden away from the wealthy – and onto the middle class and the poor."