August 17, 2012

YOU SKIPPED A STEP THERE:

Plan's Costs Far Outweigh Its Benefits (Chye-Ching Huang, AUGUST 16, 2012, NY Times)

When considering whether to eliminate taxes on capital gains, dividends and interest, we must ask: do the benefits outweigh the costs?

The costs are clear. Tax rates on capital gains and dividends that are lower than those on ordinary income encourage tax lawyers and accountants to create schemes to transform, on paper, "ordinary income" into capital gains and dividends. Time, talent and resources that could be used productively are instead poured into tax avoidance, creating a drain on the economy.

Why should we tax ordinary income either?



MORE:
Six Policies Economists Love (And Politicians Hate) (THEO FRANCIS, 7/19/12, NPR)

Three: Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people.

Four: Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you're taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.

Posted by at August 17, 2012 5:07 AM
  

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