South Carolina Senator Lindsey Graham, yet another entrant into the 2016 GOP presidential race, has a history of supporting extremely regressive tax proposals, yet at the same time has deviated from anti-tax conservatives on a number of issues.
In terms of regressive tax proposals, Sen. Graham is the latest candidate in the presidential race to voice his support for the extremely regressive flat tax. Other supporters of the flat tax include Gov. Rick Perry, Sen. Ted Cruz, Sen. Rand Paul, Ben Carson and yet to announce candidate Gov. John Kasich.
While none of the candidates, including Sen. Graham, have specified the exact details of their proposed flat tax plans, a flat tax would make our tax system substantially more regressive and likely actually increase taxes on all but the wealthiest Americans. An analysis of a flat tax proposal by Citizens for Tax Justice (CTJ) found that the plan would actually increase taxes on the bottom 95 percent of Americans by an average of $2,887 annually, but at the same time provide the top one percent of taxpayers with an annual tax break of $209,562.
Sen. Graham's enthusiastic support on the campaign trail for a flat tax should come as no surprise given the senator's history of supporting extremely regressive tax reform proposals in the U.S. senate. For example, Sen. Graham co-sponsored legislation that would have replaced the federal income tax with an 8.4 percent consumption tax, which he dubbed the "BEST tax." Given that the federal income tax is the most progressive part of the federal tax code, replacing it with a regressive consumption tax would substantially increase taxes on low- and middle-income families, while at the time providing the wealthiest Americans a massive tax cut.
Sen. Graham’s support for regressive tax change goes well beyond his support for the flat tax. During the mid-2000s for instance, Sen. Graham earned an “F” on a CTJ congressional report card for his support of the regressive and budget-busting Bush tax cuts. In addition, Sen. Graham has co-sponsored a bill to repeal the estate tax entirely, a move that would provide the richest 0.2 percent of estates with $268 billion in tax breaks over the next decade.
Although Sen. Graham has fought to make our tax system more regressive, he has shown a few moments of moderation on tax issues relative to his more conservative colleagues. The biggest deviation has been his willingness to push back against the anti-tax militancy of many of his GOP colleagues. In 2012, Sen. Graham rejected Grover Norquist’s infamous taxpayer pledge saying that he was “willing to move my party, or try to, on the tax issue.” Similarly, Sen. Graham said that he would accept a deficit reduction deal in which there were three dollars in spending cuts for every one dollar in revenue raised, which makes him distinct from Rick Perry, Rick Santorum and the entire 2012 GOP field that rejected the notion of even a ten dollars in spending cuts to one dollar in tax increases deal.
One other sensible tax position that Sen. Graham has taken is his support of the Marketplace Fairness Act, which would empower states to collect sales tax on online and other remote purchases. The move would finally end the special competitive tax advantage given to Amazon and other online retailers and provide states with additional much needed revenue.
A final, potentially praiseworthy deviation by Sen. Graham from anti-tax conservatives was his support for a cap-and-trade system. Whether it’s through an explicit carbon tax or a cap-and-trade system, either way would help combat global climate change by putting a price on to carbon and thus creating a market incentive against its use. Of course, adjustments would have to be made to other taxes to mitigate the regresssivity of a carbon tax, and it’s not clear that Graham would support these essential adjustments.
While Sen. Graham’s support of regressive tax proposals and the flat tax specifically place him well within the rightwing tax camp, his support for a variety of revenue-raising measures sets him somewhat apart from his rabidly anti-tax colleagues.