Category Archive 'Tax Reform'
04 May 2015
John Steele Gordon, in Commentary, fisks good-and-proper Nicholas Kristof’s canting, holier-than-thou “Inequality is a Choice” NYT editorial.
Is there really something terrible about the rich getting much richer, as long as the less rich are not getting any poorer, and indeed are seeing their standards of living rising over the long term, thanks to such things as Walmart, Amazon, iPhones, GPS, etc.?) …
[Kristof, in the end,] comes up with a list of possible ways to correct what might very well not need correcting, but would definitely put more money into the hands of the political class that Kristof represents (to be used, of course, strictly for the good of the poor and the downtrodden). Among these are: More government vigilance regarding monopolies and competition, strong trade unions, public-sector jobs at the minimum wage for such things as elderly care (has he checked with the unions for their opinion on this?), restrain pay at the highest levels (i.e. maximum-wage legislation), and a personal income tax that tops out at 65 percent.
Is there a single idea in there that post dates FDR, who died 70 years ago in a completely different economic universe? Indeed, most of them antedate the 20th century. Steeply progressive income taxes are straight out of the Communist Manifesto, published in 1848.
So hereâ€™s my list of ideas to lower the income inequality between rich and poor. They would actually help everyone except the political class:
Break up government monopolies, such as Medicare, the Veterans Administration, and, most important public school systems. Introducing competition into these areas of the economy is vital to improving them, because competition, and competition alone, produces hard work and innovation. Monopoliesâ€”private and governmentalâ€”are always fat, dumb, lazy, and devoted to maintaining the monopoly. The shortest route to prosperity for the poor and downtrodden is a good education and the inculcation of good work habits. They donâ€™t get that today and liberals donâ€™t give a damn. (One of the first things President Obama tried to do as president was end the school voucher program in Washington, D.C., as a thank you to the teachers unions, while sending his two daughters to a very expensive, and very good, private school: welcome to modern-day liberalism).
Introduce a flat tax, so that the private jet owners of the world canâ€™t finagle special deals with their congressional pals.
Abolish the corporate income tax. I wrote about the extraordinary benefits of doing this in the Wall Street Journal a few months ago. At least 90 percent of the tax fiddles and crony-capitalism government favors are hidden in the corporate income tax. Get rid of it and 60,000 lobbyists in Washington would need to go out and get wealth-creating jobs. Do you think private jet owners own their private jets personally? Of course not, their corporations own them and get a slew of deductions thereby.
Modern-day liberalism is about talking about helping the poor and downtrodden, while espousing policies that will only help the narrow and ever-more privileged elite of which liberals are the most vocal supporters.
Read the whole thing.
22 Nov 2011
GE CEO Jeff Immelt
From Alex Tabarrok:
The NYTimes reported earlier this year that through an extraordinary use of tax breaks and clever accounting:
[General Electric] reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
The Times highlighted the skill of GEâ€™s dream team:
G.E.â€™s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the worldâ€™s best tax law firm. Indeed, the companyâ€™s slogan â€œImagination at Workâ€ fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
More recently from The Weekly Standard we find what kind of effort it takes to pay no taxes on $14 billion in profits:
General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didnâ€™t pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked.
(FYI, the length of GEâ€™s tax return has doubled since 2006 when it (first?) filed electronically at an equivalent of 24,000 pages.)
GEâ€™s tax bill illustrates both why our corporate tax rate is too high and too low. The nominal rate is too high which encourages a real rate which is too low.
Hat tip to Walter Olson.
19 Nov 2010
Daniel Henniger identifies serious tax reform as the key issue that Congressional Republicans ought to make the centerpiece of the alternative they offer to the American people.
Last week the two chairmen of President Barack Obama’s bipartisan deficit commission, Democrat Erskine Bowles and Republican Alan Simpson, issued a set of “draft” recommendations that includes this: a new U.S. individual income tax system with only three ratesâ€”8%, 14% and 23%. You would have to move to Estonia to get a top marginal rate near 23%. Also, they would drop the U.S.’s self-destructive corporate rate of 35% to 26%.
Then yesterday came another “bipartisan” group, led by former Sen. Pete Domenici and Alice Rivlin, Bill Clinton’s OMB director and also a member of the deficit commission. Their goal: a system “to improve incentives to work, save and invest” with two personal tax rates of 15% and 27%, and a corporate rate of 27%. Theirs includes a 6.5% sales tax; Bowles-Simpson, a surprise, has no sales tax.
Proving reform fever can catch anyone, Treasury Secretary Tim Geithner on Tuesday called for a fundamental overhaul of our tax system, which “is not a sensible way to run a country.”
Lower tax rates are suddenly moving to the center of the political debate.
Saving the most important for last, Michigan GOP Congressman Dave Camp, who surely will be chairman of the tax-writing Ways and Means Committee in January, delivered a strong reform speech Tuesday. “What we need,” said Rep. Camp (also a member of the Bowles-Simpson commission), “is a comprehensive reform of the tax code that expands the tax base and lowers rates.”
Putting this in context: The current fight between the Obama White House and congressional Republicans over whether the top rate should be 39.6% or 35%, notwithstanding its immediate importance for the economy, is a ridiculous sideshow to what serious people now want to do to sync up our tax system with the goal of strong economic growth.
Words found nowhere in the deficit commission’s draft include “fairness,” “the wealthiest,” and “the top 1%.” The explicit purpose of its tax proposals is to “make America the best place in the world to start and grow a business.”
Even in our current political universe of smirking cynics, this is progressâ€”a bipartisan presidential group has put the subject of lower tax rates at the center of the policy debate.
Yes, yes, I understand the deficit commission gets down to 8-14-23 by eliminating every hallowed tax expenditure in the tax code and by taxing capital gains at ordinary rates.
But still. 23%.
Feel free to sniff at a 23% top rate. I won’t. The new Republican Congress shouldn’t either. Nor should the lifeboat full of moderate Democratic senators heading toward the 2012 whirlpool.
Read the whole thing.
The country wants real action taken to turn the economy around. This is the proposal that would do it.
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