In previous posts, I put together tutorials on the Laffer Curve, tax competition, and the economics of government spending.
Today, we’re going to look at the issue of tax reform. The focus will be the flat tax, but this analysis applies equally to national sales tax systems such as the Fair Tax.
There are three equally important features of tax reform.
- A low tax rate – This is the best-known feature of tax reform. A low tax rate is designed to minimize the penalty of work, entrepreneurship, and productive behavior.
- No double taxation of saving and investment – All major tax reform plans, such as the flat tax and national sales tax, get rid of the tax bias against income that is saved and invested. The capital gains tax, double tax on dividends, and death tax are all abolished. Shifting to a system that taxes economic activity only one time will boost capital formation, thus facilitating an increase in productivity and wages.
- No distorting loopholes – With the exception of a family-based allowance designed to protect lower-income people, the main tax reform plans get rid of all deductions, exemptions, shelters, preference, exclusions, and credits. By creating a neutral tax system, this ensures that decisions are made on the basis of economic fundamentals, not tax distortions.
All three features are equally important, sort of akin to the legs of a stool. Using the flat tax as a model, this video provides additional details.
One thing I don’t mention in the video is that a flat tax is “territorial,” meaning that only income earned in the United States is taxed. This common-sense rule is the good-fences-make-good-neighbors approach. If income is earned by an American in, say, Canada, then the Canadian government gets to decide how it’s taxed. And if income is earned by a Canadian in America, then the U.S. government gets a slice.
It’s also worth emphasizing that the flat tax protects low-income Americans from the IRS. All flat tax plans include a fairly generous “zero-bracket amount,” which means that a family of four can earn (depending on the specific proposal) about $25,000-$35,000 before the flat tax takes effect.
Proponents of tax reform explain that there are many reasons to junk the internal revenue code and adopt something like a flat tax.
- Improve growth – The low marginal tax rate, the absence of double taxation, and the elimination of distortions combine to create a system that minimizes the penalties on productive behavior.
- Boost competitiveness – In a competitive global economy, it is easy for jobs and investment to cross national borders. The right kind of tax reform can make America a magnet for money from all over the world.
- Reduce corruption – Tax preferences and penalties are bad for growth, but they are also one of the main sources of political corruption in Washington. Tax reform takes away the dumpster, which means fewer rats and cockroaches.
- Promote simplicity – Good policy has a very nice side effect in that the tax system becomes incredibly simple. Instead of the hundreds of forms required by the current system, both households and businesses would need only a single postcard-sized form.
- Increase privacy – By getting rid of double taxation and taxing saving, investment, and profit at the business level, there no longer is any need for people to tell the government what assets they own and how much they’re worth.
- Protect civil liberties – A simple and fair tax system eliminates almost all sources of conflict between taxpayers and the IRS.
All of these benefits also accrue if the internal revenue code is abolished and replaced with some form of national sales tax. That’s because the flat tax and sales tax are basically different sides of the same coin. Under a flat tax, income is taxed one time at one low rate when it is earned. Under a sales tax, income is taxed one time at one low rate when it is spent.
Neither system has double taxation. Neither system has corrupt loopholes. And neither system requires the nightmarish internal revenue service that exists to enforce the current system.
This video has additional details – including the one caveat that a national sales tax shouldn’t be enacted unless the 16th Amendment is repealed so there’s no threat that politicians could impose both an income tax and sales tax.
Last but not least, let’s deal with the silly accusation that the flat tax is a risky and untested idea. This video is a bit dated (some new nations are in the flat tax club and a few have dropped out), but is shows that there are more than two dozen jurisdictions with this simple and fair tax system.
P.S. Fundamental tax reform is also the best way to improve the healthcare system. Under current law, compensation in the form of fringe benefits such as health insurance is tax free. Not only is it deductible to employers and non-taxable to employees, it also isn’t hit by the payroll tax. This creates a huge incentive for gold-plated health insurance policies that cover routine costs and have very low deductibles. This is a principal cause (along with failed entitlement programs such as Medicare and Medicaid) of the third-party payer crisis. Shifting to a flat tax means that all forms of employee compensation are taxed at the same low rate, a reform that presumably over time will encourage both employers and employees to migrate away from the inefficient over-use of insurance that characterizes the current system. For all intents and purposes, the health insurance market presumably would begin to resemble the vastly more efficient and consumer-friendly auto insurance and homeowner’s insurance markets.
P.P.S. If you want short and sweet descriptions of the major tax reform plans, here are four highly condensed descriptions of the flat tax, national sales tax, value-added tax, and current system.
[…] bottom line is that we need real tax reform, such as a flat tax. That means getting rid of all loopholes to generate trillions of dollars of […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] a long-time proponent of tax reform and I mostly focus on the flat tax, but as I wrote last month, a national sales tax also is a good […]
[…] a long-time proponent of tax reform and I mostly focus on the flat tax, but as I wrote last month, a national sales tax also is a good […]
[…] a long-time proponent of tax reform and I mostly focus on the flat tax, but as I wrote last month, a national sales tax also is a good […]
[…] a long-time proponent of tax reform and I mostly focus on the flat tax, but as I wrote last month, a national sales tax also is a good […]
[…] a long-time proponent of tax reform and I mostly focus on the flat tax, but as I wrote last month, a national sales tax also is a good […]
[…] fun to write about big-picture tax issues such as tax reform (for instance, should we have a flat tax or national sales […]
[…] Fundamental tax reform is back on the agenda, with House Republicans promising a vote this year on a national sales tax, so I dug into C-Span’s archives so I could share a few of my thoughts from 2007 on the Fair Tax. […]
[…] Fundamental tax reform is back on the agenda, with House Republicans promising a vote this year on a national sales tax, so I dug into C-Span’s archives so I could share a few of my thoughts from 2007 on the Fair Tax. […]
[…] Fundamental tax reform is back on the agenda, with House Republicans promising a vote this year on a national sales tax, so I dug into C-Span’s archives so I could share a few of my thoughts from 2007 on the Fair Tax. […]
[…] Fundamental tax reform is back on the agenda, with House Republicans promising a vote this year on a national sales tax, so I dug into C-Span’s archives so I could share a few of my thoughts from 2007 on the Fair Tax. […]
[…] So let’s conclude by instead asking a fundamental question: Is it better to continue on the current path (an ever-more-complex tax system requiring ever-more-money for the IRS) or is it better to have a clean tax system? […]
[…] it’s Christmas, I don’t think anyone is interested in boring diatribes about tax reform or government […]
[…] unabashed fan of having a better tax system for America. Replacing the internal revenue codewith a sensible tax system would mean a more prosperous country and a less corrupt […]
[…] unabashed fan of having a better tax system for America. Replacing the internal revenue code with a sensible tax system would mean a more prosperous country and a less corrupt […]
[…] And eliminating all forms of double taxation should be a top goal if we want fundamental tax reform. […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] with a combination of entitlement reform (which deals with a direct cause of third-party payer) and tax reform (which deals with an indirect cause of third-party […]
[…] of Jon Caldera, here’s some of Colorado’s fiscal history, which began with a flat tax in the 1980s and then culminated with TABOR in the […]
[…] of Jon Caldera, here’s some of Colorado’s fiscal history, which began with a flat tax in the 1980s and then culminated with TABOR in the […]
[…] with a combination of entitlement reform (which deals with a direct cause of third-party payer) and tax reform (which deals with an indirect cause of third-party […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] An efficient and effective IRS will be far more likely with a simple and honest tax system. […]
[…] An efficient and effective IRS will be far more likely with a simple and honest tax system. […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] main point is that we should be reforming and simplifying the tax code rather than dramatically expanding the budget of a corrupt Internal Revenue […]
[…] main point is that we should be reforming and simplifying the tax code rather than dramatically expanding the budget of a corrupt Internal Revenue […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] levies. For instance, the personal income tax could be largely defanged if the current system was repealed and replaced by a simple and fair flat […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] is why good tax reform plans eliminate the tax bias against […]
[…] is why good tax reform plans eliminate the tax bias against […]
[…] I stated in the video, the only big difference between a flat tax and national sales tax is the collection […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] But that means less power for politicians, so don’t hold your breath waiting for genuine tax reform. […]
[…] If you want some serious analysis of taxes, here’s an explanation of the economics of taxation and here’s a tutorial on fundamental tax reform. […]
[…] all, what happened in Iowa is a triumph for tax reform and another case study on the benefits of tax competition (just like we’ve seen in states […]
[…] would be very good news for Iowa’s economy and Iowa’s […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] be helpful. Genuine entitlement reform could address the problems with Medicare and Medicaid, and fundamental tax reform could get rid of the healthcare […]
[…] be helpful. Genuine entitlement reform could address the problems with Medicare and Medicaid, and fundamental tax reform could get rid of the healthcare […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
Any taxation of income reduces incentives to work and is open to gaming the system.
Last I checked criminals (aka politicians) don’t report all of their income.
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] bottom line is that we know how to define good tax policy, but very few governments have an interest in maximizing liberty and prosperity. The challenge is […]
[…] bottom line is that we know how to define good tax policy, but very few governments have an interest in maximizing liberty and prosperity. The challenge is […]
[…] By all means, we can try to jump Switzerland and move into first place. But let’s increase tax compliance the smart way – by lowering tax rates and reforming the tax code. […]
[…] on this issue. At some point, I hope there will be a White House and a Congress that want to reform the tax code and fix entitlements. When that happens, I won’t want any […]
[…] on the election, there’s no point of producing a serious column on some weighty issue such as tax reform or spending […]
[…] be sure, all income groups could do even better with pro-growth policies such as tax reform and spending restraint. And we also could adopt policies that are especially beneficial for the […]
[…] the goal is more prosperity, lawmakers who work on tax issues should be guided by the “Holy Trinity” of good […]
[…] the world of tax policy, big-picture issues such as tax reform can capture the public’s attention (should we junk the IRS, instance, and adopt a flat […]
[…] Trump. Δεν έχει σημασία αν η ομιλία μου έχει ως θέμα τη φορολογική μεταρρύθμιση, τα επιδόματα, τη δημοσιονομική κρίση ή τον φορολογικό […]
[…] the way, I care about whether a change in tax policy will make the country more prosperous in the long run and don’t fixate on whether the change helps or hurts any particular income group. So […]
[…] also worth nothing that Cato has been dogmatically in favor of tax reform that would eliminate preferences for owner-occupied housing. That was our position 20 years ago. […]
[…] written many times about how a flat tax is far less destructive than so-called progressive […]
[…] my interest in fiscal policy, I’m always on the lookout for articles on tax reform and the burden of government […]
[…] I review a tax proposal, I automatically check whether it is consistent with the “Holy Trinity” of good […]
[…] want lower taxes. I want to reform taxes. And I want to abolish existing taxes and block new […]
[…] to accept or reject some very important initiatives, including votes on Colorado’s flat tax, Arizona’s school choice system, and a carbon tax in the state of […]
[…] never studied the topic since I was focused at the time on domestic issues such as tax reform, Social Security reform, and the economic effect of government […]
[…] of the solution is to get rid of the health care exclusion in the internal revenue code as part of fundamental tax reform. If that happened, it’s less likely that health insurance would be tied to employment (and […]
[…] country would be much better off with fundamental reform of both the tax system and Social […]
[…] single penny should be returned to taxpayers as part of pro-growth tax reform that lowers marginal tax rates and reduces the tax bias against saving and […]
[…] ideal answer is fundamental tax reform. For instance, all forms of double taxation are abolished with a flat […]
[…] fundamental tax reform, there have been some interesting developments at the state level in recent […]
[…] fundamental tax reform, there have been some interesting developments at the state level in recent […]
[…] important, but genuine tax reform also means no bias against saving and […]
[…] on fiscal policy, I normally share my four videos on the economics of government spending and my primer on fundamental tax […]
[…] we should reform the tax code to eliminate […]
[…] I’m a proponent of tax reform, I don’t like special favors in the tax […]
[…] are three reasons why the right kind of tax reform can help the economy grow […]
[…] Indeed, that’s been the biggest political issue (and oftentimes biggest economic issue) in every recent tax fight (the Trump tax reform and Obama’s fiscal cliff), as well as the issue that generates the most controversy when discussing tax reform. […]
[…] have to direct people to various columns about marginal tax rates, double taxation, tax favoritism, tax reform, corporate taxation, and tax […]
[…] recommended a spending cap, of course, but I also said the tax system needed reform to enable more […]
[…] by the principles of a simple and fair flat tax, I’ve been toiling for decades in the vineyard of tax reform. […]
[…] by the principles of a simple and fair flat tax, I’ve been toiling for decades in the vineyard of tax reform. […]
[…] by the principles of a simple and fair flat tax, I’ve been toiling for decades in the vineyard of tax reform. […]
[…] just the tip of the iceberg. They cover lots of additional material, including spending limits, tax reform, and free […]
[…] I view better compliance as a secondary benefit. My main goal is to have a tax system that doesn’t impose needlessly high levels of economic […]
[…] Privacy is an under-appreciated benefit of fundamental tax reform. Not only would donors and nonprofits no longer have to share information with the IRS under a flat […]
[…] means another wave of reform may happen. Hopefully including some of my favorite policies, such as a pure flat tax as well as some constitutional spending […]
[…] of whether one blames politicians or the IRS. Throw the tax code in the garbage and replace it with a simple and fair flat tax (or, if there are ever sufficient votes to undo the 16th Amendment, replace the internal revenue […]
[…] gold standard of tax reform has always been the Hall-Rabushka flat tax, which is a consumption-base tax because there is no […]
[…] papel principal é falar sobre economia e políticas fiscais, explicando os impactos tanto das receitas como das despesas […]
[…] I’m not satisfied. Our long-run goal should be fundamental tax reform. And that means replacing the current system with a simple and fair flat […]
[…] right kind of tax reform can help people directly and […]
[…] of the Committee for a Responsible Federal Budget. We touch on several topics relating to tax reform, but pay close attention to the discussion on federal spending and red ink because you’ll see […]
[…] step is considered radical and impractical by DC standards. There’s no discussion of fundamental tax reform. Instead, the debate revolves around whether we can reduce a couple of tax rates in one part of […]
[…] I’ve written a couple of times to explain why the deduction for state and local taxes should be eliminated as part of pro-growth tax reform. […]
[…] I’ve written a couple of times to explain why the deduction for state and local taxes should be eliminated as part of pro-growth tax reform. […]
[…] I’ve written a couple of times to explain why the deduction for state and local taxes should be eliminated as part of pro-growth tax reform. […]
[…] I’ve written a couple of times to explain why the deduction for state and local taxes should be eliminated as part of pro-growth tax reform. […]
[…] having a substantive debate about corporate tax policy, double taxation, marginal tax rates, and fundamental tax reform (plus spending restraint so big tax cuts are […]
[…] tax policy was a religion, the Holy Trinity of reform would be very […]
[…] Second, it’s very important to get rid of double taxation (what he calls “capital income”), but you don’t need a VAT to make that happen. There’s no double taxation with a flat tax. […]
[…] Second, it’s very important to get rid of double taxation (what he calls “capital income”), but you don’t need a VAT to make that happen. There’s no double taxation with a flat tax. […]
[…] those of us who want to scrap the tax system, this is a […]
[…] those of us who want to scrap the tax system, this is a […]
[…] Genuine tax reform would be the second-best fiscal policy reform to boost economic growth.* […]
[…] of the solution is to get rid of the health care exclusion in the internal revenue code as part of fundamental tax reform. If that happened, it’s less likely that health insurance would be tied to employment (and losing […]
[…] be talking about tax reform, the sharing economy, and strategies to constrain big […]
[…] be talking about tax reform, the sharing economy, and strategies to constrain big […]
[…] be talking about tax reform, the sharing economy, and strategies to constrain big […]
[…] of the solution is to get rid of the health care exclusion in the internal revenue code as part of fundamental tax reform. If that happened, it’s less likely that health insurance would be tied to employment (and losing […]
[…] of the solution is to get rid of the health care exclusion in the internal revenue code as part of fundamental tax reform. If that happened, it’s less likely that health insurance would be tied to employment (and […]
[…] argue that we don’t need fundamental tax reform because tax burdens don’t have much impact on economic […]
[…] daily columns usually revolve around public policy issues such as tax reform, entitlements, and corrupt government. And while sometimes get a bit agitated about bad things in […]
[…] argue that we don’t need fundamental tax reform because tax burdens don’t have much impact on economic […]
[…] the new Trump budget, I hit on some of my usual topics such as growth, real-world fiscal numbers, tax reform, fake budget cuts, entitlement reform, and my Golden […]
[…] peppered with questions about Donald Trump. It doesn’t matter whether my speech was about tax reform, entitlements, fiscal crisis, or tax competition, most people wanted to know what I think about The […]
[…] why. Major tax reform is based on the assumption that achieving the first two goals will lower tax revenue and achieving […]
[…] papel principal é falar sobre economia e políticas fiscais, explicando os impactos tanto das receitas como das despesas […]
[…] would the economy grow faster if we got fundamental reform such as the flat […]
[…] would the economy grow faster if we got fundamental reform such as the flat […]
[…] would the economy grow faster if we got fundamental reform such as the flat […]
[…] I don’t like it because I worry it sets the stage for a value-added tax. I don’t like it because it is designed to undermine tax competition. I don’t like it because it has a protectionist stench and presumably violates America’s trade commitments. I don’t like it because that part of the plan only exists because politicians aren’t willing to engage in more spending restraint. And I don’t like it because politicians should not try to reinvent the wheel when we already know the right way to do tax reform. […]
[…] I don’t like it because I worry it sets the stage for a value-added tax. I don’t like it because it is designed to undermine tax competition. I don’t like it because it has a protectionist stench and presumably violates America’s trade commitments. I don’t like it because that part of the plan only exists because politicians aren’t willing to engage in more spending restraint. And I don’t like it because politicians should try to reinvent the wheel when we already know the right way to do tax reform. […]
[…] gold standard of tax reform has always been the Hall-Rabushka flat tax, which is a consumption-base tax because there is no […]
[…] would reduce penalties on work, saving, investment, and entrepreneurship. No, it’s not quite a flat tax, which is the gold standard of tax reform, but it is a very pro-growth initiative worthy of […]
[…] €12,000 annually (the government also wants to expand double taxation, which also is contrary to the tax-income-only-once principle of a pure flat […]
[…] 2021, genuine entitlement reform and sweeping tax reform could get enacted and Dan Mitchell could then safely retire to the Cayman Islands and introduce […]
[…] a good and simple tax system, which taxes income only one time (including business income), the entire provision would be […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] entrepreneurship. But leftists, with their fixation on inequality, are reflexively opposed to the types of tax reforms that enable more saving, investment, and […]
[…] Endorsing the deduction for charitable contributions isn’t an optimistic sign for those of us who support fundamental tax reform. […]
[…] primary role is to talk about the economics of fiscal policy, explaining the impact of both taxes […]
[…] primary role is to talk about the economics of fiscal policy, explaining the impact of both taxes […]
[…] primary role is to talk about the economics of fiscal policy, explaining the impact of both taxes and […]
[…] been advocating for good tax reform for more than two decades, specifically agitating for a simple and fair flat […]
The only reason people in some cases would reject to a flat tax is so they can perpetuate continuous class warfare. The tax rate in terms of percentage is different than the dollar amount. Under a flat tax, the poor still technically pay nothing.
[…] been advocating for good tax reform for more than two decades, specifically agitating for a simple and fair flat […]
[…] been advocating for good tax reform for more than two decades, specifically agitating for a simple and fair flat tax. I get excited […]
[…] been advocating for good tax reform for more than two decades, specifically agitating for a simple and fair flat […]
I know that tax reform should not be a partisan subject. However, it seems to me that liberals would be brought around to a flat tax if labor and investment got taxed equally. Maybe I am wrong. To be honest, I do not know.
[…] And Trump’s failure to sign the no-tax-hike pledge exacerbates the concerns, particularly when combined with his inconsistent statements on tax reform. […]
I prefer to tax consumption rather than labor. However, Herman Cain’s 9-9-9 plan which taxed production, labor and consumption equally sounded good to me. Rick Santorum’s 20/20 tax plan, where corporate income, personal income, capital gains and dividends were taxed at the same rate also sounded good. The 20/20 tax plan should get support from both liberals and conservatives. Why? Because under this plan, the rich will not get out of paying their fair share. Taxes may be low, however, I see nothing wrong with taxing labor and investment at the same rate. Now, I would keep the deductions for home mortgage interest, business purchases health insurance and charitable contributions. Of course, I would have a tax free threshold of $270, 000.00 before the 20% tax rate was applied. After that, 20% tax on everything above that.
[…] ideal fiscal system not only has a low rate, but also taxes income only one time and only taxes income earned inside […]
Useful blog post ! I Appreciate the details . Does someone know if my business might locate a fillable FL Special Warranty Deed Individual Grantors example to edit ?
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
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[…] So it’s also a good time to remind ourselves that there is a better way. […]
[…] But when I’m going through a pragmatic-libertarian phase, I grudgingly accept that my fantasies won’t be realized and focus on incremental reform. And that means I want a simple and fair system like the flat tax, which is based on the principle that all income should be taxed, but only one time and at one low rate. […]
[…] But when I’m going through a pragmatic-libertarian phase, I grudgingly accept that my fantasies won’t be realized and focus on incremental reform. And that means I want a simple and fair system like the flat tax, which is based on the principle that all income should be taxed, but only one time and at one low rate. […]
[…] But when I’m going through a pragmatic-libertarian phase, I grudgingly accept that my fantasies won’t be realized and focus on incremental reform. And that means I want a simple and fair system like the flat tax, which is based on the principle that all income should be taxed, but only one time and at one low rate. […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] making a (correct) argument against double taxation. But why take the risk of a VAT when there are very simple and safe ways to eliminate the tax bias against saving and […]
[…] It’s that time of year. Those of us who wait until the last minute are rushing to get tax returns filed (or extensions submitted). So, it’s also a good time to remind ourselves that there is a better way. […]
[…] So it’s also a good time to remind ourselves that there is a better way. […]
[…] So it’s also a good time to remind ourselves that there is a better way. […]
[…] So it’s also a good time to remind ourselves that there is a better way. […]
[…] of economic liberty can use this non-controversy controversy to our advantage by explaining that good tax policy is the best way to encourage […]
[…] of economic liberty can use this non-controversy controversy to our advantage by explaining that good tax policy is the best way to encourage both growth and […]
[…] of economic liberty can use this non-controversy controversy to our advantage by explaining that good tax policy is the best way to encourage both growth and […]
[…] that is true. But what about a stable monetary system? And what about areasonable tax regime and a modest burden of government […]
[…] that is true. But what about a stable monetary system? And what about a reasonable tax regime and a modest burden of government […]
[…] I just finished a series of speeches to civic groups on some of my usual topics, in this case tax policy, the recipe for growth, and libertarian […]
[…] where I just finished a series of speeches to civic groups on some of my usual topics, in this case tax policy, the recipe for growth, and libertarian […]
[…] where I just finished a series of speeches to civic groups on some of my usual topics, in this case tax policy, the recipe for growth, and libertarian […]
[…] where I just finished a series of speeches to civic groups on some of my usual topics, in this case tax policy, the recipe for growth, and libertarian […]
[…] where I just finished a series of speeches to civic groups on some of my usual topics, in this case tax policy, the recipe for growth, and libertarian […]
[…] is why I want pro-growth tax reform, a smaller government, and less suffocating red […]
[…] I give speeches in favor of tax reform, I argue for policies such as the flat taxon the basis of both ethics and […]
[…] I give speeches in favor of tax reform, I argue for policies such as the flat tax on the basis of both ethics and […]
[…] I give speeches in favor of tax reform, I argue for policies such as the flat tax on the basis of both ethics and […]
[…] I give speeches in favor of tax reform, I argue for policies such as the flat tax on the basis of both ethics and […]
[…] I give speeches in favor of tax reform, I argue for policies such as the flat tax on the basis of both ethics and […]
[…] Third, incredibly, FT “assumes” that there would be no evasion/avoidance. In the real world, the expected 20-30% shortfall cannot be made up by increasing FT’s 30% rate to 50-60%, and would result instead in a NEW Income Tax. Congress would surely repeal FT’s laughable Sunset Clause and the 16th Amendment will not be repealed any time soon. http://sceldridge.wix.com/sceldridge#!the-myth-that-the-irs-is-abolished-/c1tu0 & https://danieljmitchell.wordpress.com/2012/08/11/a-primer-on-the-flat-tax-and-fundamental-tax-reform… […]
[…] has basically put forth a pure version of the plan first proposed by economists at Stanford University’s Hoover […]
[…] has basically put forth a pure version of the plan first proposed by economists at Stanford University’s Hoover Institution. Perhaps most important […]
[…] has basically put forth a pure version of the plan first proposed by economists at Stanford University’s Hoover […]
[…] We certainly didn’t get the things on my Christmas list, like genuine entitlement reform and fundamental tax reform. […]
[…] the economic ladder. But let’s recommit ourselves to fight harder for pro-growth policies such astax reform and entitlement reform so their ascent up the ladder will be […]
[…] economic ladder. But let’s recommit ourselves to fight harder for pro-growth policies such as tax reform and entitlement reform so their ascent up the ladder will be […]
[…] bad news is that there hasn’t been a stampede by candidates to embrace this type of fundamental tax reform. But the good news is that they all want to move in that […]
[…] at least we know the right solutions. We need entitlement reform and tax reform in order to restore a genuine free market and solve the government-created third-party payer […]
[…] course, achieving genuine tax reform won’t be […]
[…] the way, I don’t fully agree with these changes since I think all income should be taxed the same way. In other words, if there’s going to be a state income tax, then the guy who runs the local pet […]
[…] the way, I don’t fully agree with these changes since I think all income should be taxed the same way. In other words, if there’s going to be a state income tax, then the guy who runs the local […]
[…] it’s a fringe benefit that real tax reform would substantially de-fang the […]
[…] By the way, I’m ecumenical on a replacement system. There are other plans that satisfy the goals of real reform. […]
[…] are many moving pieces to tax reform, so plans shouldn’t be judged solely on the basis of tax […]
[…] any of them are perfect. They all fall short of the pure flat tax, which is the gold standard for full tax reform. Another problem is that these proposals won’t be plausible or sustainable unless […]
[…] answer depends on whether one hopes for perfect policy. The flat tax is the gold standard for genuine tax reform and Mr. Trump’s plan obviously falls short by that […]
[…] answer depends on whether one hopes for perfect policy. The flat tax is the gold standard for genuine tax reform and Mr. Trump’s plan obviously falls short by that […]
[…] my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current […]
[…] And Trump’s failure to sign the no-tax-hike pledge exacerbates the concerns, particularly when combined with his inconsistent statements on tax reform. […]
[…] tax would boost prosperity, and they’ll simply shrug and tell you to jump in a lake because genuine tax reform would reduce the power and influence of Washington’s political […]
[…] the tax code in Washington. Which is why honest and well-intentioned leftists should support real tax reform. Just like they should support sweeping […]
[…] the tax code in Washington. Which is why honest and well-intentioned leftists should support real tax reform. Just like they should support sweeping […]
[…] speeches outside the beltway, I sometimes urge people to be patient with Washington. Yes, we need fundamental tax reform and genuine entitlement reform, but there’s no way Congress can make those changes with Obama in […]
[…] speeches outside the beltway, I sometimes urge people to be patient with Washington. Yes, we need fundamental tax reform and genuine entitlement reform, but there’s no way Congress can make those changes with Obama in […]
[…] speeches outside the beltway, I sometimes urge people to be patient with Washington. Yes, we need fundamental tax reform and genuine entitlement reform, but there’s no way Congress can make those changes with Obama in […]
[…] speeches outside the beltway, I sometimes urge people to be patient with Washington. Yes, we need fundamental tax reform and genuine entitlement reform, but there’s no way Congress can make those changes with Obama in […]
[…] speeches outside the beltway, I sometimes urge people to be patient with Washington. Yes, we need fundamental tax reform and genuine entitlement reform, but there’s no way Congress can make those changes with Obama […]
[…] speeches outside the beltway, I sometimes urge people to be patient with Washington. Yes, we need fundamental tax reform and genuine entitlement reform, but there’s no way Congress can make those changes with Obama […]
[…] nation very much needs fundamental tax reform, so it’s welcome news that major public figures – including presidential candidates – are […]
[…] Our nation very much needs fundamental tax reform, so it’s welcome news that major public figures – including presidential candidates […]
[…] nation very much needs fundamental tax reform, so it’s welcome news that major public figures – including presidential candidates – are […]
[…] nation very much needs fundamental tax reform, so it’s welcome news that major public figures – including presidential candidates […]
[…] of picking winners and losers with special preferences and penalties, the tax code should be simple and fair, treating all economic activity […]
[…] of picking winners and losers with special preferences and penalties, the tax code should be simple and fair, treating all economic activity […]
[…] In my more realistic fantasy world, we might not be able to restore constitutional limits on Washington, but at least we could reform the tax code so that revenues were generated in a less destructive fashion. […]
[…] In my more realistic fantasy world, we might not be able to restore constitutional limits on Washington, but at least we could reform the tax code so that revenues were generated in a less destructive fashion. […]
[…] In my more realistic fantasy world, we might not be able to restore constitutional limits on Washington, but at least we could reform the tax code so that revenues were generated in a less destructive fashion. […]
[…] In my more realistic fantasy world, we might not be able to restore constitutional limits on Washington, but at least we could reform the tax code so that revenues were generated in a less destructive fashion. […]
[…] shutting down the Export-Import Bank, closing the Department of Housing and Urban Development, and reforming the tax code, I make the standard economic arguments for smaller government. But I also explain that reform is a […]
[…] course not. At the risk of stating the obvious, this is why my work on fundamental tax reform is intertwined with my work on constitutional and legal mechanisms to limit the size and scope of […]
[…] are the principles that explain why I like tax reform, why I promote the Laffer Curve, and why I advocate for tax […]
[…] maybe, just maybe, if the IRS budget is held in check, the politicians will conclude that we need tax reform and spending restraint. Remember, when all other options are exhausted, politicians sometimes do […]
[…] my 2012 primer on fundamental tax reform, I explained that the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I explained that the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I explained that the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I explained that the three biggest warts in the current […]
[…] my 2012 primer on fundamental tax reform, I explained that the three biggest warts in the current […]
[…] course not. At the risk of stating the obvious, this is why my work on fundamental tax reform is intertwined with my work on constitutional and legal mechanisms to limit the size and scope of […]
[…] course not. At the risk of stating the obvious, this is why my work on fundamental tax reform is intertwined with my work on constitutional and legal mechanisms to limit the size and scope of […]
[…] all good tax reform plans, such as the flat tax, are based on “territorial taxation,” which is the common-sense […]
[…] all good tax reform plans, such as the flat tax, are based on “territorial taxation,” which is the common-sense […]
[…] P.S. If you want to a simple rule to determine what’s a legitimate tax deduction, just remember that economic activity should be taxed equally (and at the lowest possible rate). That’s why businesses should have a cash-flow tax, and it’s why households should have a neutral system like a flat tax or national sales tax. […]
[…] And if you want to examine some of the component issues of healthcare reform, we have videos on Medicaid, Medicare, and tax reform. […]
[…] becoming a second FDR), at some point we will need unified government in order to adopt much-needed tax reform and entitlement […]
[…] This means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
[…] mean I’ll give up on the fight for tax reform, but I always try to be […]
[…] said many times that fundamental tax reform is the answer, but that’s only part of the […]
I’ve always been a fan of the Flat Tax, but I would appreciate your comments on the following:
(1) Why are so few countries using it, and why are there so few “winners” among them?
(2) What has been the experience of those countries using a Flat Tax?
(3) What caused some countries to abandon the Flat tax?
(4) Is there a source for conveniently reviewing the experience of those countries that use the Flat Tax?
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] If you want to understand real tax reform, click here. […]
[…] be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are […]
[…] up our healthcare system, and I can wax poetic about the need to restore market forces both with tax reform and with significant changes to Medicare and […]
[…] up our healthcare system, and I can wax poetic about the need to restore market forces both with tax reform and with significant changes to Medicare and […]
[…] they started pushing for lower marginal tax rates or fundamental tax reform, the polling numbers would probably be […]
[…] know the right policies to fix the tax […]
[…] P.S. : pour une règle simple pour déterminer si une déduction fiscale est légitime ou non, souvenez-vous juste que toute activité économique devraient être taxée de la même manière, et au taux le plus bas possible. C’est pourquoi la taxation des entreprises devraient être faites sur la base des cash flow généré, et pourquoi la fiscalité des ménages devrait être un système neutre comme une flat tax ou une TVA nationale. […]
[…] P.S. If you want to a simple rule to determine what’s a legitimate tax deduction, just remember that economic activity should be taxed equally (and at the lowest possible rate). That’s why businesses should have a cash-flow tax, and it’s why households should have a neutral system like a flat tax or national sales tax. […]
[…] P.S. If you want to a simple rule to determine what’s a legitimate tax deduction, just remember that economic activity should be taxed equally (and at the lowest possible rate). That’s why businesses should have a cash-flow tax, and it’s why households should have a neutral system like a flat tax or national sales tax. […]
[…] means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
[…] moral of the story is that there should be tax cuts (ideally as part of tax reform), not tax […]
[…] even though I’m a big advocate of tax reform, the flat tax is only a partial […]
People keep trying to convince the political class that a flat tax or lower tax rates will result in a better economy and more revenue to the government. But you are wasting your breath. You can talk Laffer Curves and economic growth until you are blue in the face. They already know these things. However the current system gives them something much more important to them: political power and personal wealth. That is why the change will never come from the top.
[…] in order to regain “confidence and trust” does not include tax cuts or fundamental reform. Instead, Monsieur Saint-Amans is referring to the bureaucracy’s work on “tax base […]
[…] part of fundamental tax reform, we need to phase out the healthcare exclusion in the tax code – a perverse policy that encourages grotesque waste, inefficiency, and featherbedding in most […]
[…] flat tax. That obviously wasn’t what Simpson and Bowles decided to propose, but the flat tax is a benchmark that allows us to judge the components of their […]
[…] is set to occur, largely because of real bracket creep. This means tax cuts (ideally accompanied by tax reform) are needed to protect taxpayers from rising tax […]
[…] is set to occur, largely because of real bracket creep. This means tax cuts (ideally accompanied by tax reform) are needed to protect taxpayers from rising tax […]
[…] is an exaggeration. How to fix the mess at the IRS is a fiscal policy question, and that requires tax reform rather than spending […]
[…] is an exaggeration. How to fix the mess at the IRS is a fiscal policy question, and that requires tax reform rather than spending […]
[…] is an exaggeration. How to fix the mess at the IRS is a fiscal policy question, and that requires tax reform rather than spending […]
[…] of my missions in life is fundamental tax reform. I would like to replace the corrupt internal revenue code with a simple and fair flat […]
[…] of my missions in life is fundamental tax reform. I would like to replace the corrupt internal revenue code with a simple and fair flat […]
[…] of my missions in life is fundamental tax reform. I would like to replace the corrupt internal revenue code with a simple and fair flat […]
[…] All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform. […]
[…] tax code should be radically simplified and flattened so that one’s entire tax filing fits on a single postcard. The permanent bureaucracy as a class is fundamentally hostile to that large swath of Americans who […]
[…] tax code should be radically simplified and flattened so that one’s entire tax filing fits on a single postcard. The permanent bureaucracy as a class is fundamentally hostile to that large swath of Americans who […]
[…] There’s no need to raise taxes. Indeed, there’s amply room to lower the tax burden and reform the corrupt tax code. […]
[…] Amen. If politicians in high-tax nations really want to hurt tax havens, they should lower tax rates and reform their tax systems. […]
[…] It’s not true that the current code has a “plethora of tax breaks.” Or, to be more specific, there are lots of tax breaks, but the ones that involve lots of money are part of the personal income tax, such as the state and local tax deduction, the mortgage interest deduction, the charitable contributions deduction, the muni-bond exemption, and the fringe benefits exclusion. […]
[…] though I’m a big fan of tax reform, I explained back in June that I’m not very comfortable with the “blank slate” tax reform […]
[…] though I’m a big fan of tax reform, I explained back in June that I’m not very comfortable with the “blank slate” […]
[…] Tax reform would give us more growth, but it also would reduce one of the major source of corruption in Washington. […]
[…] while I obviously think tax and spending policy is important, pro-growth fiscal policy may not mean much in a society where […]
[…] Tax reform would give us more growth, but it also would reduce one of the major source of corruption in Washington. […]
[…] case for pro-market reform (meaning not only Medicaid reform and Medicare reform, but also tax reform to help deal with the third-party payer […]
[…] case for pro-market reform (meaning not only Medicaid reform and Medicare reform, but also tax reform to help deal with the third-party payer […]
[…] only quibble is that the video doesn’t explain how government policies – such as the healthcare exclusion in the tax code – should be blamed for the grotesque waste, inefficiency, and featherbedding in most parts of the […]
[…] a big proponent of tax reform, so at first I was very excited to learn that Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) […]
[…] a big proponent of tax reform, so at first I was very excited to learn that Senators Max Baucus (D-MT) and Orrin Hatch (R-UT) […]
[…] said many times that fundamental tax reform is the answer, but that’s only part of the […]
[…] mean I’ll give up on the fight for tax reform, but I always try to be […]
[…] mean I’ll give up on the fight for tax reform, but I always try to be […]
[…] said many times that fundamental tax reform is the answer, but that’s only part of the […]
[…] the health sector, both because of spending programs such as Medicare and Medicaid and because of tax and regulatory distortions that have mutated the supposedly private insurance market into some bizarre form of pre-paid, […]
[…] only quibble is that the video doesn’t explain how government policies – such as the healthcare exclusion in the tax code – should be blamed for the grotesque waste, inefficiency, and featherbedding in most parts of the […]
[…] right kind of tax reform would generate more growth and also reduce corruption in Washington. Politicians no longer would […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] the risk of over-simplifying, we will never get tax reform unless we figure out how to implement entitlement […]
[…] If you want to understand real tax reform, click here. […]
[…] If you want to understand real tax reform, click here. […]
[…] flat tax. That obviously wasn’t what Simpson and Bowles decided to propose, but the flat tax is a benchmark that allows us to judge the components of their […]
[…] close on a broader point, I’ve written before about the principles of tax reform and explained that it’s important to have a low tax […]
[…] This means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
[…] This means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
Jacob:
My immediate concern with the idea of a flat tax based on the information found on this blog is the tax cliff between $35,000 [zero bracket amount] and $35,001 [full flat tax applied] for a family of four. In addition, the various tax cliffs for single people and families of various sizes.
Jacob, I think you misunderstand the application of the flat tax. Whatever the income level at which the zero bracket ends, the tax rate is applied only to that portion of income above the zero bracket. The family with an income of $35,001 pays taxes only on $1 (for a total tax bill of 17 cents), not the full $35,001 (which would result in the much larger tax bill of over $9,000). It’s the same way (though with far fewer brackets) that the current progressive income tax system works.
“the one caveat that a national sales tax shouldn’t be enacted unless the 16th Amendment is repealed so there’s no threat that politicians could impose both an income tax and sales tax.”
Please note, Mr. Mitchell, that repealing the 16th Amendment will NOT prevent the imposition of an income tax. In Pollock v. Farmers’ Loan & Trust Co. (1895), the decision that necessitated the 16th Amendment, the Supreme Court ruled that taxes only on CERTAIN TYPES of income were unconstitutional. Specifically, taxes on rents, dividends, and interest, were judged to be “direct taxes”, and thus subject to the Article I, Section 9, Clause 4 prohibition on direct taxes, unless assessed in proportion to the Census. The Supreme Court, very clearly, had NO ISSUE with a tax on incomes derived from labor (wages), or any other income that did not fall into the category of “direct taxes”. Presumably, corporate and business income (largely derived from the sale of good and services) would be equally taxable, with or without the 16th Amendment.
Furthermore, the ruling itself was shaky. It passed by the slimmest of margins (5-4). It was based, first on the explicitly assumed notion that property tax is, by definition, a “direct tax” (which would be tough to discern as the intent of Article I, Section 9, Clause 4 of the Constitution), then on the even shakier extension that a tax on income DERIVED from property is ALSO a direct tax (with that logic, income on wages could have just as easily been labeled a “direct tax”, because wages are derived from the labor of a person, and a tax on a person IS, BY DEFINITION and without need of interpretation, a direct tax.) Moreover, the apportionment restriction, it seems to me, makes it clear that no tax can be considered “direct” unless it is, in fact, POSSIBLE to apportion that tax among the States by population, and a tax on incomes, regardless of source, is impossible to apportion in that manner.
My point is, in this day and age, the Supreme Court makes its living “interpreting” the Constitution, and it could easily re-interpret the phrase “direct tax” to NOT include taxes on rent, dividends, and interest, and in fact that would probably be a more accurate interpretation than Pollock. And so even that small portion of income derived from personal and real property could be made taxable EVEN IF the 16th Amendment were repealled. But the much larger percentage of income derived from labor and sales most certainly would still be taxable, without need of any further constitutional interpretation, if the 16th Amendment were repealled.
So, if the goal is to prevent the dual existence of an income tax and a sales tax, repealling the 16th Amendment won’t work. For that matter, there is currently no constitutional prohibition on a national sales tax, so even if the flat tax were enacted, that would not prevent a sales tax from existing simultaneously. Frankly, Mr. Mitchell, I don’t see why you support the flat tax over the fair tax, because, even if you were right about repealling the 16th Amendment, there’s no similar amendment that could be repealled to prevent a sales tax being imposed, because no Amendment is necessary for its imposition. Either way, fair tax or flat tax, there would have to be a NEW constitutional amendment to prevent the other. IF that’s important.
Personally, I don’t have a problem with the simultaneous existence of a fair tax and a flat tax, as long as the rates are both reasonable (totalling less than 20% of income).
Also, we should do away with corporate income tax. That is a PRIME example of double taxation – the corporation is taxed on the income it receives from sales, and then, when what’s left after taxes is distributed to stockholders as dividends, the dividends are taxed as well. Only people should be taxed, and a corporation isn’t a person. Moreover, eliminating corporate income tax would spur economic growth. I know there’s not a lot of sympathy for “corporations” right now, but corporations aren’t always big, evil, commercial empires. Hundreds of thousands of small businesses and family farms incorporate themselves for the purpose of protecting the assets of their owners, and if corporate income is made untaxable, the remaining small businesses and family farms will incorporate as well. Give them an incentive to invest in their businesses, to hire workers, by eliminating the corporate income tax.
[…] in some areas, such as the fight for pro-growth and humane tax reform, I see very little reason for […]
[…] means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
[…] close on a broader point, I’ve written before about the principles of tax reform and explained that it’s important to have a low tax […]
[…] means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
[…] means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan […]
[…] one of the reasons why the right kind of tax reform will generate more prosperity is that double taxation of saving and investment is eliminated. With […]
[…] be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are […]
[…] be sure, that doesn’t mean we’re seeing good policies of tax reform and fiscal restraint. And we still face a very dour fiscal future unless entitlements are […]
[…] a big fan of fundamental tax reform, in part because I believe in fairness and want to reduce […]
[…] while I obviously think tax and spending policy is important, pro-growth fiscal policy may not mean much in a society where […]
[…] Party automatically means better politicians and/or better election results. But every advocate of tax reform and smaller government should be very happy that there are people in the country who are pressuring […]
[…] with a combination of entitlement reform (which deals with a direct cause of third-party payer) and tax reform (which deals with an indirect cause of third-party […]
[…] Tax reform could solve another part of the problem by removing the bias for over-insurance, which presumably would lead people to pay out of pocket and use insurance for large, unexpected costs. […]
[…] Tax reform could solve another part of the problem by removing the bias for over-insurance, which presumably would lead people to pay out of pocket and use insurance for large, unexpected costs. […]
[…] a big fan of fundamental tax reform, in part because I believe in fairness and want to reduce […]
[…] since there’s no chance of any good tax reform with Obama in the White House, there’s no need to squabble over the best plan. Instead, our […]
[…] also worth nothing that Cato has been dogmatically in favor of tax reform that wouldeliminate preferences for owner-occupied housing. That was our position 20 years ago. […]
[…] also worth nothing that Cato has been dogmatically in favor of tax reform that would eliminate preferences for owner-occupied housing. That was our position 20 years ago. […]
[…] also worth nothing that Cato has been dogmatically in favor of tax reform that would eliminate preferences for owner-occupied housing. That was our position 20 years ago. […]
[…] he’ll be serving), it’s virtually impossible to envision good entitlement reform, pro-growth tax reform, and any changes to lessen the likelihood of future Greek-style fiscal collapse (as amusingly […]
[…] he’ll be serving), it’s virtually impossible to envision good entitlement reform, pro-growth tax reform, and any changes to lessen the likelihood of future Greek-style fiscal collapse (as amusingly […]
[…] This is also an issue in the United States, and Steve Moore of the Wall Street Journal is worried that the GOP ticket is debt-obsessed and doesn’t have sufficient enthusiasm for lower tax rates and tax reform. […]
The presentation is absurd. Author implies his sample form would be typical, but his form would not cover any income other than wages, thus allowing a self-employed person to report no income, or let him define his income as the draw he took from his business. This is a gross understatement of “the devil is in the details” and will prove to be the death of this silliness to the effect something can be close to this simple and still fairly distribute the tax burden.
[…] I would be delighted to have a national sales tax, but what I really want is a low-rate, non-discriminatory system that isn’t biased against saving and investment. […]
[…] A Primer on the Flat Tax and Fundamental Tax Reform […]
[…] All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform. […]
[…] with a combination of entitlement reform (which deals with a direct cause of third-party payer) and tax reform (which deals with an indirect cause of third-party […]
[…] All things considered, I think this last option is the worst policy development of 2012. To be sure, I’m a bit biased since my work focuses on public finance issues and I’ve spent 20 years advocating for tax reform. […]
[…] a strong believer in fundamental tax reform. We need a system like the flat tax to improve economic […]
[…] stated, I’m a big advocate of fundamental tax reform, and I would like to scrap the corrupt internal revenue code and replace it with a simple and fair […]
[…] stated, I’m a big advocate of fundamental tax reform, and I would like to scrap the corrupt internal revenue code and replace it with a simple and fair […]
[…] Tax reform would give us more growth, but it also would reduce one of the major source of corruption in Washington. […]
[…] a strong believer in fundamental tax reform. We need a system like the flat tax to improve economic […]
[…] a strong believer in fundamental tax reform. We need a system like the flat tax to improve economic […]
[…] flat tax championed by Dick Armey and Steve Forbes. If you want more information, click here and […]
[…] A Primer on the Flat Tax and Fundamental Tax Reform […]
[…] only quibble is that the video doesn’t explain how government policies – such as the healthcare exclusion in the tax code – should be blamed for the grotesque waste, inefficiency, and featherbedding in most parts of […]
[…] each other to the point of exhaustion, thus enabling forward movement on a pro-growth agenda of tax reform and reductions in the burden of government […]
[…] P.S. And if like 20-minute doses of Dan Mitchell, here are my video series on the Laffer Curve and tax reform. […]
[…] each other to the point of exhaustion, thus enabling forward movement on a pro-growth agenda of tax reform and reductions in the burden of government […]
[…] P.S. I’ll be very happy next Wednesday because the political silly season will be over and we can get back to what really matters – figuring out how to control the burden of government spending, how to implement much-needed entitlement reform, and how to fix the corrupt tax system. […]
[…] P.S. I’ll be very happy next Wednesday because the political silly season will be over and we can get back to what really matters – figuring out how to control the burden of government spending, how to implement much-needed entitlement reform, and how to fix the corrupt tax system. […]
[…] P.S. I’ll be very happy next Wednesday because the political silly season will be over and we can get back to what really matters – figuring out how to control the burden of government spending, how to implement much-needed entitlement reform, and how to fix the corrupt tax system. […]
[…] Everyone pays, say 10-15%, of their income, with no deductions (Dan Mitchell has a good take down here). It’s still not “fair,” because the “rich” will still pay more, […]
[…] payer, which is caused by government programs such as Medicare and Medicaid along with a system of tax code-driven over-insurance in the supposedly private […]
[…] payer, which is caused by government programs such as Medicare and Medicaid along with a system of tax code-driven over-insurance in the supposedly private […]
[…] payer, which is caused by government programs such as Medicare and Medicaid along with a system of tax code-driven over-insurance in the supposedly private […]
[…] close on a broader point, I’ve written before about the principles of tax reform and explained that it’s important to have a low tax […]
[…] close on a broader point, I’ve written before about the principles of tax reform and explained that it’s important to have a low tax […]
[…] close on a broader point, I’ve written before about the principles of tax reform and explained that it’s important to have a low tax […]
[…] I have a handful of simple rules for good tax policy. […]
[…] of the principles of good tax policy and fundamental tax reform is that there should be no double taxation of income that is saved and invested. Such a policy […]
[…] tax. That obviously wasn’t what Simpson and Bowles decided to propose, but the flat tax is a benchmark that allows us to judge the components of their […]
[…] of the principles of good tax policy and fundamental tax reform is that there should be no double taxation of income that is saved and invested. Such a policy […]
[…] done thorough blog posts highlighting the economic benefits of the flat tax, but I find that most people are passionate about tax reform because they view the current system […]
My immediate concern with the idea of a flat tax based on the information found on this blog is the tax cliff between $35,000 [zero bracket amount] and $35,001 [full flat tax applied] for a family of four. In addition, the various tax cliffs for single people and families of various sizes.
[…] done thorough blog posts highlighting the economic benefits of the flat tax, but I find that most people are passionate about tax reform because they view the current system […]
Nice post, but it is a pushing an agenda that should be stated outright.
First, the post implies that under flat tax the overall taxation will be lower. This is plain wrong. If federal gov wants/needs to collect 2 trillion, they\’ll collect 2 trillion. We can play around who specifically gets taxed, but the overall economy gets hit by the same amount.
Second issue – this proposal is not a \”flat\” tax. It is a progressive income tax with two levels – 0% on the family deductible and x% on the rest. If 2 levels are better than 1, why not have 3 or 4 levels, or even 10?
[…] September 17, 2012, Don Mitchell writes on International Liberty that we need fundamental tax reform, in part because he believes in fairness and wants to reduce […]
[…] a big fan of fundamental tax reform, in part because I believe in fairness and want to reduce […]
[…] a big fan of fundamental tax reform, in part because I believe in fairness and want to reduce […]
[…] a big fan of fundamental tax reform, in part because I believe in fairness and want to reduce […]
[…] the GOP ticket is debt-obsessed and doesn’t have sufficient enthusiasm for lower tax rates and tax reform. Stylistically, Paul Ryan’s Republican convention speech last night was a grand slam. …But was […]
[…] with a combination of entitlement reform (which deals with a direct cause of third-party payer and tax reform (which deals with an indirect cause of third-party payer). Rate this:Share […]
[…] GOP ticket is debt-obsessed and doesn’t have sufficient enthusiasm for lower tax rates and tax reform. Stylistically, Paul Ryan’s Republican convention speech last night was a grand slam. […]
[…] Medicare reform doesn’t directly address this problem, just as block-granting Medicaid and reforming the tax system don’t automatically restore a market-based […]
[…] A Primer on the Flat Tax and Fundamental Tax Reform […]
[…] The time came a long time ago, as a matter of fact. Proponents of tax reform explain that there are many reasons to junk the internal revenue code and adopt something like a flat tax. […]
Reblogged this on Freedom from the tyranny of U.S. citizenship-based taxation for U.S. and dual citizens outside the U.S. and commented:
“One thing I don’t mention in the video is that a flat tax is “territorial,” meaning that only income earned in the United States is taxed. This common-sense rule is the good-fences-make-good-neighbors approach. If income is earned by an American in, say, Canada, then the Canadian government gets to decide how it’s taxed. And if income is earned by a Canadian in America, then the U.S. government gets a slice.”
Reblogged this on This Got My Attention.