October 30, 2011

WE ARE ALL NEOCONOMISTS NOW:

A Flat Tax Would Be Fine, A Consumption Tax True Perfection (John Tamny, 10/30/11, Forbes)

To put it very simply, tax rates - particularly on high earners today - are high precisely because deductions reduce the burden. A flat tax would remove politicians from the business of offering favors, and the certainty wrought by something flat would drive all manner of productive work to a higher level.

All this said, a flat tax remains a price. Worse, it's a price placed on productive work effort. As it stands now, a flat tax would serve as a cost and penalty placed on economy-boosting endeavors. We're used to being fleeced at various rates at this point, but the idea that our work costs us something per federal whim should horrify us, not to mention that a flat tax ensures that the vital few who do the most to enhance our economic spirits would pay the most to the federal government under such a regime.

So while we shouldn't let the perfect be the enemy of the near perfection that would be a flat tax, we should certainly aspire to something better. The most entrepreneurial nation on earth should not be taxing work, let alone taxing its most productive citizens the most.

All of which brings us to a national consumption tax that would lead to the abolishment of income taxes, along with taxes on estates, capital gains, and presumably everything else. This surely trumps a tax that penalizes work and investment, though like the flat tax, it has its problems.


Posted by at October 30, 2011 7:21 PM
  

blog comments powered by Disqus
« REAGAN WEPT: | Main | THE WELFARE STATE IS THE TRIBUTE THAT BUYS THE MILITARY COMPLEX: »