April 11, 2017

WE ARE ALL NEOCONOMIST NOW:

4 surprisingly good tax reforms that Trump is considering (Jeff Spross, April 11, 2017, The Week)

Here are four of the best ones that the Trump administration is reportedly considering:

1. Eliminate the payroll tax. This is the tax that's ostensibly dedicated to Social Security. Every employee in the country pays a 6.2 percent tax rate directly, and then their employer pays an additional 6.2 percent rate on what they pay the employee. [...]

2. A border adjustment tax. This is an idea that's been pushed by Rep. Kevin Brady (R-Tex.): Introduce a new deduction into the corporate tax code that allows U.S. companies to deduct the costs of the goods they export, while they still have to pay a tax on the goods they import. It's estimated to raise $1 trillion in revenue over a decade. And it would grant a tax advantage to all economic activity that shrinks the U.S. trade deficit rather than widens it. [...]

3. A carbon tax. This would be a tax penalty levied on all energy sources that produce CO2, in an effort to discourage carbon emissions and encourage clean energy use. The Trump administration is infamous for scoffing at climate concerns, so this might seem like the last thing they'd pursue. And indeed, after reports surfaced that they were looking into a carbon tax, a White House spokesperson denied it was "under consideration."

But a carbon tax would make a certain amount of sense. Among business-friendly types who admit climate change is a problem, the carbon tax is seen as a vastly more market friendly solution than the regulations the Obama administration was pursuing. Gary Cohn, head of Trump's National Economic Council and a former president of Goldman Sachs, is a fan of the idea. It's Stephen Bannon, the reactionary nationalist on Trump's team, who opposes it -- and Bannon's star is reportedly waning.

So a carbon tax could be a politically useful way to find some revenue, possibly bring Democrats on board, and make Trump's approach to climate change look less appalling.

We should be taxed for consuming, not for earning or saving/investing.

Posted by at April 11, 2017 6:24 AM

  

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