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Via George Will (and Newsweek), Tax Reform I Can Actually Be Excited About

I know, I know: I get excited about deregulation, I’m a weirdo. But apparently there’s this Wyden-Gregg proposal floating around, and it sounds really good.

From George Will, “Reforming the Glorious Privilege:”

Their approach is orthodox—pay for lower rates by broadening the base, and do that by eliminating most of the almost 10,000 complexities (deductions, credits, and other preferences) that distort the economic decisions of individuals and businesses. Individuals and couples with incomes up to $200,000 would do better, or no worse, under Wyden-Gregg than under current law. Wyden-Gregg would reduce the number of income-tax brackets to three—15, 25, and 35 percent—and would cut the corporate tax rate, currently the second highest in the industrial world (it is lower than Japan’s), to 24 percent. More than 95 percent of small businesses—those with gross annual receipts of less than $1 million, which are crucial to creating jobs—would be allowed to expense all equipment and inventory costs in a single year.

Also, Wyden-Gregg would encourage personal saving in a nation in which almost a third of all households have no retirement savings. It would enable a married couple to contribute up to $14,000 a year to tax-favored retirement and savings accounts.

The only thing I’d add is a qualifier on “broadening the base:” even though there’s an obscene proportion of people who pay little or no income tax, that doesn’t mean those people aren’t being taxed at obscene rates themselves. We have payroll taxes, sales taxes, taxes on particular transactions, property taxes etc. What I want is for people to know what taxes they’re paying and how, and yes, I do hold that government is accountable for making sure people know they’re being taxed, especially in this age where things that should be obvious are buried under piles of legalese and things I can barely understand even nearing a PhD.

4 Comments

  1. Is Newsweek still for sale?

  2. I guess that is a start in the right direction. I favor a flat rate say 10% on every dollar with two deductions. A poverty rate deduction and a personal dwelling deduction, interest as now.Every Dollar that comes in will be taxed and every Fee and Local tax will be eliminated. If everyone had 90% of their income to spend and their were no loop holes I believe this to be an equitable tax. And if it was simplified We could do with less IRS Employees and Congress would only have to come in six months out of the year.

  3. This David disagrees with that David. Poor wage earners can ill afford much of anything deducted out of their wages. After food, shelter and utilities are paid, precious little is left. The wealthy on the other hand have much more left over to support a higher tax rate after paying for the aforementioned necessities of living.

  4. Broadening the income tax base is fine. However, lets not forget that what is really at issue here is Congress. There is a certain inability of Congressman and Senators to stop spending money that isn’t coming from their own pockets. We, the American people are “enabling” Congress by continuing to give legislators an open checkbook. Congress continues to hide spending in the most sneaky ways but they maintain that it’s the way business gets done in Washington. Well, I’ve lived in Washington and attended the 2pm Wednesday and Thursday cocktail parties given by lobbyists. I watched sausage being made. Trust me when I say, it’s ugly and distasteful. It takes a special kind of person to increase the spending someone else’s money and then get on TV and call the legislation a tax cutting measure.

    The system itself needs to be changed. George Will’s enthusiasm needs to be reigned in somehow. Increasing the tax base so that high income earners can continue to earn more at a time of no growth for the “average American family” shouldn’t sound right to even the uninformed political spectator. I sure hope it doesn’t sound right to you either.

    Brooks@ObamaTaxReform.Com

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