Today the White House requested ideas on how to reform the federal tax code. Fortunately, we have some for them. Make your voices heard, and send your suggestions here.
Here is a simple way to reform the tax code:
Start from scratch.
If unwilling to do that, a more incremental process would include the following.
- Eliminate the corporate income tax, which stifles job growth, and gives incentives for American businesses to send jobs overseas.
- Let the death tax die. Tell the government that taxing your dollars for the third time is too much—especially in the middle of funeral preparations.
- Get rid of employment taxes. Taxing behavior reduces it. Taxing apple-eating reduces apple-eating. Therefore, taxing employment will reduce…?
- Reduce top marginal rates on taxes. The higher the top marginal tax rate, the more perverse the incentives.
- Drop trade taxes. Tariffs and quotas are a tax on foreign buying, plain and simple. This includes the recent tariff on Chinese-produced tires.
To quote from the American’s for Tax Reform about page:
Americans for Tax Reform (ATR) opposes all tax increases as a matter of principle.
The government’s power to control one’s life derives from its power to tax. We believe that power should be minimized.
To the reader: when considering tax reform, remember the following first principles:
- Low rate. Taxes should be low. Government should be small. ‘Nuff said.
- Visibility. If the government is going to take a bite from your wallet, you should know. Hidden taxes, like the VAT and others are particularly dangerous because they allow the government to take your money without you knowing.
- Simplicity. Simplifying taxes is something that everyone can agree on. Taxes should not take a team of lawyers and tax experts to comprehend.
- Pro-growth. All taxes are bad, but some are worse than others. Taxes that distort the market away from job growth (such as capital gains taxes, corporate income taxes, employment taxes, and high marginal rates) are particularly bad. This means that a revenue-neutral tax cut should move toward a flatter tax, and a broader consumption base.