By The Simplifier, on January 11th, 2010
The IRS is a most unhelpful “service.” By simplifying the tax code a bit and reengineering how certain things are done, we could make the IRS much more customer friendly, saving the economy hundreds of billions of dollars of time, professional advice, and headaches.
We could have the IRS help employers by simplifying payroll tax collection. We could have the IRS help solve problems of pollution, crime, welfare dependency and illegal immigration.
True, there are concerns with power and privacy, so weigh the tradeoffs carefully in the proposals that follow in this category.
By The Simplifier, on January 11th, 2010
Conservatives keep calling for a flat tax. Such a tax would be much simpler to collect and would remove some terrible distortions to the economy. So be it. Give it to them. But if you are a liberal you need not give them the flax tax as currently proposed.
We could have a “flat tax” that is more progressive than our current system! It would not be perfectly flat, but neither are the flat tax proposals coming from the Right. In the posts under this category we shall outline a set of fairly simple proposals which boil down to one or two brackets, plus a minimal set of deductions. By merging several taxes together the net result will be progressive and simpler than many proposals from the Right.
But perhaps the simplicity of what is to follow will appeal to many on the Right despite its progressive nature. It may be time for ideologues of the Left and Right to band together against the special interests who have polluted our tax code…
By The Simplifier, on January 11th, 2010
It is all well and good to be a wonk pontificating from the sideline on how to fix the tax code. It is yet another matter to realistically ask how to put the proposals into action given the current political actors.
How can a liberal vote for a flattened tax code? How can a conservative stomach a citizen’s dividend or negative income tax? How can a progressive get behind what looks to be a tax cut for big corporations? How can a libertarian raise enough revenue to balance the budget?
We will wrestle with these questions here, in the Tax Politics category. We will also expose the lies and half-truths used by politicians and their supporters to get their way, lies which poison public debate and pollute the tax code. All sides are guilty: liberal and conservative, libertarian and progressive. We recognize the overwhelming temptation to bend the truth to play the political game, and intend our criticism to be constructive. Deception makes for bad policy; truth for bad politics. Since we are not running for office, we can take on the burden of unpopularity to get to the truth.
By The Simplifier, on January 10th, 2010
Measured in dollars, self-funded retirees are wealthy. It takes real wealth to provide even a moderate income using conservative investments. As such, any tax plan that tries to soak the wealthy is likely to clobber retirees of even moderate income. Conversely, any tax system that allows people to save enough for retirement is likely to provide loopholes for the truly rich.
Should we simply expand Social Security to provide a full retirement income even for those in the upper middle class in order to have a more progressive tax system? Or should we go the other way and encourage more people to save for their own retirements?
If the latter, how do we protect wage earners from Wall St. vultures? Is independent retirement realistic for the lower classes? Can they handle the ups and downs of the market? Or will we always need Social Security or the equivalent?
The answer is: yes, we can have a safe and stable private retirement system. And there are surprisingly liberal reasons for doing so. That said, much needs to be done about Wall St. first. But it is worth doing, because the current pay-as-you-go Social Security system threatens to bankrupt the nation, and it has already ripped of
By The Simplifier, on January 10th, 2010
No more income tax! No more filing! No more government meddling in personal and business affairs! Ah, what a pleasant dream! But not an easy dream to realize, alas.
The money has already been spent. Even with drastic cuts in “necessary” government programs, we need high taxes to pay down the debt and pay off the retirees. The income tax may be ugly, unpleasant, and intrusive, but it also works. No other tax is likely to bring in as much revenue. Those who advocate the Fair Tax or the Single Tax as complete replacements stretch credulity.
This is not to say their ideas lack any merit. On the contrary, we can learn much from the advocates of these alternative tax systems. Replacing all of our income taxes with either by itself, however, is unrealistic. If we want to do away with the income tax, we’ll need multiple replacement taxes and many government spending cuts. For this reason most of this site is devoted to making the income taxes less bad. There, much can be done right away.
For the long term let us dream, nonetheless. Let us dream realistically, however, and craft replacements for the income tax that would actually work, work both financially and politically. The replacements must be fair and enforceable, and allow the economy to grow.
|
|