As has been widely noted, the Republicans’ proposed “tax reform” is not only just more BAU (business as usual, i.e. cut taxes for the wealthy), it’s also not real reform. At best, it’s just another iteration of D.C. policy tweaks packaged for PR purposes as “reform.”
You want real tax reform? This is what real tax reform would look like:
1. Shred the entire 2,700 page tax code and replace it with a 25-page code. As I explained in The Fetid Swamp of Tax Reform (November 10, 2017), the 2,700 page current tax code is a complexity thicket designed to hide tax breaks and subsidies for big political donors.
Politicos give lip service to simplifying the tax code for PR purposes, but no politico actually wants radical simplification because this would eliminate the biggest grab-bag of political favors available to pass out to big donors.
Though radical simplification is politically impossible, it’s the first and most important real reform.
2. Replace the entire convoluted mess of income tax for the bottom 99.5% with transaction taxes collected at the point of transaction. A transaction tax is similar to a value-added tax (VAT) or sales tax, but it’s radically different in key ways: a transaction …read more