I think this is one reason that a flat tax makes a lot of sense.
If you eliminate all (or most) tax deductions, you eliminate the ability of the private sector to use government to minimize the tax bills of certain people, industries etc... at the expense of others. Not only would that be fairer, it would be economically superior.
Of course, since such a high percentage of people in this country are "net" receivers of benefits (pay no taxes at all after adding back their government benefits), there probably should not be any taxes on income up to "X" dollars. Then the flat rate would kick in.
I also think we should move away from taxes on capital (interest, dividend, and capital gains) and move towards consumption taxes. To keep it less regressive, items like food, beverages, and other requirements of life could be exempt and luxury items could be targeted.
I am generally against using tax policy to manipulate the economy or behavior, but as long as we have already moved towards such a economically moronic and less free society, we are going to need substantial tax revenue. So we might as well do it in a way that does the least damage over the long haul instead of trying to maximize the short term at the expense of the long term or playing class warfare. |
