Posted on 01/23/2013 7:53:41 AM PST by SeekAndFind
The interminable fiscal cliff negotiations in Washington produced almost no substantial reform of taxes despite a general agreement that both our income and corporate tax codes are dense, confusing and layered with perverse incentives that favor some economic activities over others at the expense of overall growth.
"The existing tax code makes compliance difficult," IRS Taxpayer Advocate Nina Olson recently wrote, "leaving many [taxpayers] unaware how their taxes are computed and even what rate of tax they pay. It enables sophisticated taxpayers to reduce their tax liabilities and...it undermines trust in the system."
Just weeks into the new year, however, two governors have decided to raise the stakes in the debate about tax reform in America by proposing to dramatically reshape their state tax systems. Within days of each other Louisiana's Bobby Jindal and Nebraska's Dave Heineman recommended eliminating their states' personal and corporate income taxes, major sources of revenues in both states, and replacing the lost proceeds with additional sales tax revenues (Jindal also wants to dispose of his state's franchise tax). Both proposals are designed to be revenue-neutral, that is, to generate enough new revenue to replace what the cuts with forego.
Why bother? Because the weight of academic evidence tells us that income taxes are among the most counterproductive of levies which can dampen economic activity far more than other kinds of taxes. What Jindal and Heineman are daring to argue, in other words, is that not all taxes are created equal and that government can be smarter about the way it raises revenues.
(Excerpt) Read more at realclearmarkets.com ...
This is the way to go. Eliminate the “progressive” income taxes and move to sales or consumption taxes. And very appropriate that they do this on the centennial of the 16th amendment.
Although the tax on items will go up, the real cost of items will go down. And everybody will be paying taxes, not just those who work (though they all paid for the taxes anyway in the price of the products).
It should be noted that here in MA, the governmor is planning to do the exact opposite, lower the sales taxes and increase the income taxes. So that those who work will bear a greater burden and the layabouts will pay less.
As more states eliminate their income taxes in favor of sales taxes, pressure will be brought to bear on the Federal govt. to follow their lead. The income tax as an idea is on its way out!!
get out while you can!
*pssst*
you do know it’s possible to go a whole year without your toes freezing, right?
come to think of it, i should prolly put some socks on... it might dip down to 60F today
;)
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