Most of the US government’s receipts come from taxes. Of these, the largest source of revenue is the personal income tax. In addition, our progressive tax system results in Americans who earn 50 per cent of all income paying about 97 per cent of total income taxes. Add in compliance costs, complexity and length of the income tax forms, the redistribution of wealth by means of refundable tax credits, the abuses of the Internal Revenue Service, the use of the tax code for social engineering, and the intrusive nature of the whole rotten scheme and you have a system ripe for reform, says Vance.
The tax reform idea that has been around the longest is the flat tax. Under a flat tax, there are no tax brackets every taxpayer’s income is taxed at the same rate and there are generally no deductions. There are, however, two problems with flat tax proposals, though not necessarily with the concept of a flat tax itself, says Liberty.
The problem with most tax reform plans is that they focus on simplifying the tax code, or on some arbitrary concept of fairness, rather than making the code less progressive. Even worse, they do not even hint at lowering American’s overall tax burden, says Liberty.
Source: Lawrence M. Vance,Taxed Out,/i> Liberty, April 2010
For text: Liberty Magazine, April 2010.
For more on Taxes: http://www.ncpa.org/sub/dpd/index.php?Article_Category=20
First published by the National Center for Policy Analysis, Dallas and Washington, USA
FMF Policy Bulletin/ 06 April 2010
