SEARCH BLOG: TAXES
Taxes. The Bush tax cuts on income, capital gains and dividends are set to expire at year's end. On top of that some in Congress want to slap on a value-added tax (VAT) of 5%. That would be quite a one-two punch. If you make a six-figure income in a high-tax state, such as New York or California, your overall tax burden would be more than 50%. As go our dollars, so goes our productivity: The federal tax code's forest of confusion, moral hazards and ethical traps means that we spend way too much of our time and energy filling out tax forms.
Question: What is a better tax code? Answer: If 17% to 18% is the ideal size of federal government (as a percentage of GDP), then 17% to 18% ought to be the tax rate. It would apply to everyone's first and last dollar, including capital gains and dividends. There would be no payroll tax because it would be built into the 17% to 18% flat tax rate. [read more]That got me to wondering if Rich Karlgaard had run across my post from
FRIDAY, MARCH 25, 2005
This approach allows either the "nominal rate" or the exemption to be changed without increasing the complexity of the approach. Examples of how a simple, flat tax with a single, constant exemption would work with an 18% nominal rate: