April 11, 2006
Little likelihood of tax system overhaul
I found this article by Robert J. Samuelson on the lack of progress on the tax system overhaul interesting. I'd be interested to hear comments on his arguments for why the current system is unlikely to change and the benefits that would accrue from implementation of the plans proposed by the President's commission in November. Let the schoolin' begin.
We're from the government, and here to help.
Posted by LatteSipper at April 11, 2006 6:06 PM
Silence's law applies here "Only 535 reasons why that'll never happen!" (Hope I quoted it okay)
There was much excitement around for Social Security reform, you can click on the archives and see the discussion.
By the time tax reform came around, we were a little subdued. The kind version is that this is a war presidency, and he cannot finish his domestic agenda; the less kind version is that this White House is not skilled enough to get things through an obstreperous Congress.
The commission was a disaster. I was upset from the start as they were instructed to use the static CBO model that says every dollar of tax cut is added to the deficit. You and I might argue as to how much tax cuts pay for themselves, but to refuse to consider any economic gains from simplification or reduction is an abdication of principle -- and it doomed it from the start.
Some of the suggestions had merit but I saw one of the architects on Larry Kudlow's show. A Republican committee member as trying to explain it to a friendly, Republican, brilliant, professional economist. When I saw that it was too confusing for these two, I had my concerns that it wasn't gonna be a big hit.
JohnGalt and I are huge fans of consumption-based-taxation and I think we even have Silence on our side. It's the way to go: privacy, ease of compliance, captures black market monies. But it also reduces government power. Right about now is where Silence's law comes in...
Silence's law applies here "Only 535 reasons why that'll never happen!" (Hope I quoted it okay)
There was much excitement around for Social Security reform, you can click on the archives and see the discussion.
By the time tax reform came around, we were a little subdued. The kind version is that this is a war presidency, and he cannot finish his domestic agenda; the less kind version is that this White House is not skilled enough to get things through an obstreperous Congress.
The commission was a disaster. I was upset from the start as they were instructed to use the static CBO model that says every dollar of tax cut is added to the deficit. You and I might argue as to how much tax cuts pay for themselves, but to refuse to consider any economic gains from simplification or reduction is an abdication of principle -- and it doomed it from the start.
Some of the suggestions had merit but I saw one of the architects on Larry Kudlow's show. A Republican committee member as trying to explain it to a friendly, Republican, brilliant, professional economist. When I saw that it was too confusing for these two, I had my concerns that it wasn't gonna be a big hit.
JohnGalt and I are huge fans of consumption-based-taxation and I think we even have Silence on our side. It's the way to go: privacy, ease of compliance, captures black market monies. But it also reduces government power. Right about now is where Silence's law comes in...
Posted by: jk at April 11, 2006 7:13 PMCount me in on consumption based taxation.
But how do you tax foreign purchases? A free trader would never want to have tariffs, levies or duties.
Posted by: AlexC at April 11, 2006 11:53 PMAlexC: I think we could probably apply a tax for use of infrastructure. It has to come through a port or some sort and then, like postal charges, a destination fee could be levied based on the declared value of the package. This would certainly work with the '100% container check' mindset.
Posted by: mdmhvonpa at April 12, 2006 11:42 AMA free trader would never want to have ANY kind of tax, but there are legitimate national expenses that must be funded. Foreign purchases must be taxed just the same as domestic ones. Foreign sellers who refuse to comply with tax remittance shall be prosecuted under law.
Or, mdmh's port of entry model may work even better. The point is that this "levy" is exactly the same thing as the domestic consumption tax. (To do otherwise effectively subsidizes foreign sellers against domestic ones.)
Posted by: johngalt at April 13, 2006 3:28 PMWow, I have my own law now. Yeah, count me in on consumption tax. Again the problem is how to get the change when it removes power from those who must make the change. Since I have been a bit absent of late in discussions I will tie in here with the "pox" thread above. Forget line item veto, what we need is line item votes. How can even the best of our politicians not be frustrated by the choice of voting for a huge pork project because it is part of a larger bill that supplies our troops with armor?
Posted by: Silence Dogood at April 15, 2006 12:50 AMInteresting idea, the line-item vote. But isn’t the omnibus bill the cornerstone of our sausage of democracy (metaphor alert!!!) Ted Kennedy says "I'll vote for your tax cuts if I can slip in a few million for midnight basketball in Southey." It would seem to thwart the mechanism for compromise. Handing that off to the Executive at least moves it down the street.
Truth be told, I am skeptical of the line item veto. Like term limits, it makes a problem go away, but whether it is constitutionally sound, I am not certain.
Posted by: jk at April 15, 2006 11:58 AM | What do you think? [6]