Skip to comments.Milton Friedman - Why Tax Reform Is Impossible
Posted on 06/30/2012 11:30:02 PM PDT by Nachum
Friedman explains why our tax code is enormously complex and not likely to change.
(Excerpt) Read more at youtube.com ...
Vid at link
If the Republicans get a strangle hold on the House, this November, they could have a chance at reforming the tax code.
That would be the Carter Administration, 1978.
I was in law school, taking Tax Law, the year after Reagan’s reform of the tax code. It made a huge difference. I laughed at my professor, who was so disappointed that his elegant presentations were of no use any more. Every once in awhile he did a problem anyway, just to show us how much fun it used to be, pre-1986.
Tax simplification is not only possible, it’s been done before.
But, having viewed a few minutes, it might as well have been given on the 29th.
In a nut shell, would you be upset if all you paid in tax for 100K income is $4000 per year?
If Americans were truly taxed in terms of how much things actually cost to do, you could probably halve the amount that is paid in taxes easily.
Not according to Friedman they couldnt.
Friedman is correct, in that the self-interest of the electorate and politicians, make tax reform very difficult or impossible.
But that is under normal circumstances, where there are enough minority (not racial, but number) Congress members who can block any meaningful reform.
However, if it is a rare occasion that one party has a lock on the legislative and executive, anything is possible.
True they could, but they won't.
I did look. Thanks, it is an interesting concept. I like the simplicity of the APT tax and the elimination of the income and other taxes. However, the simplicity and low rate is also the problem. If 0.35% is revenue neutral, then 0.45% may pay for more government programs, and 0.55% would pay for even more pet political projects, etc. The transaction tax isn't clearly visible and is paid along the chain of transactions. Sounds like the VAT. I prefer a national sales tax along the line of the FairTax precisely because it is so high (upwards of 30%) to be revenue neutral and so clearly visible as a separate line on the sales receipt stating "Federal Sales Tax."
Ultimately, the issue really isn't taxing it is spending. Taxes are the symptom and run away spending is the illness. The smaller the percentage and less visible, the easier it is to raise and feed more spending. On that count, I would oppose the APT. Make taxes as clearly visible as possible and paid by the every consumer. When the true cost of the beast is visible to all is when you will get agreement to reduce spending.
A version of this was described about 30 years ago in a Science Fiction short story (I think it was Analog). It was called the FIST (floating instantaneous Sales Tax). Everyone used a computer for their transactions, and the sales tax was applied to each transaction. (Instantaneous)
When Congress passed a spending bill, the sales tax rate would be adjusted (hence, floating).
Now for the good part. Every one of these computers has a red button to register dissatisfaction if the FIST went up.
a) if a majority if the voters in a congressional district punched the red button within any 24 hour period, a small explosive charge that had been inserted into the back of the congresscritter’s head would explode.
b) if a majority of the voters in a State ...
c) if a majority of the voters in the country ...
If we are going to do the APT, we should do the FIST.
APTTAX.com is a wide flat tax on all financial transactions.
A wider flat tax, lowers the taxes for people that have been paying out the nose, taxes. And the people that have not paid will start paying.
Liberals like it as an add on tax to all the other taxes, ant that is a FAIL.
Conservatives and Libertarians want it to replace all the federal taxes. And it could replace the state sales tax.
Take a look at APTTAX.com, its not a sales tax or a vat tax.
I don't understand the argument, that this is a hidden tax.
And yes politicians can raise our taxes, there is no defense against that. Does not matter what tax system we have they can still raise the rates.
The economy would boom under APT, and yes the government would have more income (Trouble). And yes lawmakers could mess with the rates. We cannot change behavior of our system of government. We can change to less intrusive way of collecting revenue. And become close to a almost tax free economy.
I think it would work better than what we have now. The taxes we have now just kill our economy.
From what I’ve read, it’s not an income tax either, but a tax for moving money.
It’s not going to work, because it would stop trading dead in its tracks.
Traders are not stupid, in fact, overseas trading will move back to the United States.
No need for secret accounts and such.
Since the United States will have no income or capital gains tax.
Sorry I have been busy with the family summer schedule and have not had the chance to read your post until now. I literally laughed out loud. I love it and would be all in favor of FIST. Thanks.