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.
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.