The authors observe that consumption taxation is superior to income taxation because it does not penalize saving and investment and propose that the U.S. income tax system be completely replaced by a progressive consumption tax. They argue that the X tax, developed by the late David Bradford, offers the best form of progressive consumption taxation for the United States and outline concrete proposals for the X tax's treatment of numerous specific economic issues.
Reality-based arguments against right-wing fantasies: the case for reducing income inequality, rebuilding our infrastructure, investing in education, and putting people back to work. Midcentury America was governed from the center, a bipartisan consensus of politicians and public opinion that supported government spending on education, the construction of a vast network of interstate highways, healthcare for senior citizens, and environmental protection. These projects were paid for by a steeply progressive tax code, with a top tax rate at one point during the Republican Eisenhower administration of 91 percent. Today, a similar agenda of government action (and progressive taxation) would be portrayed as dangerously left wing. At the same time, radically anti-government and anti-tax opinions (with no evidence to support them) are considered part of the mainstream. In Take Back the Center, Peter Wenz makes the case for a sane, reality-based politics that reclaims the center for progressive policies. The key, he argues, is taxing the wealthy at higher rates. The tax rate for the wealthiest Americans has declined from the mid-twentieth-century high of 91 percent to a twenty-first-century low of 36 percent—even as social programs are gutted and the gap betweeen rich and poor widens dramatically. Ever since Ronald Reagan famously declared that government was the problem and not the solution, conservatives have had an all-purpose answer to any question: smaller government and lower taxes. Wenz offers an impassioned counterargument. He explains the justice of raising the top tax rates significantly, making a case for less income inequality (and countering society's worship of the wealthy), and he offers suggestions for how to spend the increased tax revenues: K-12 education, tuition relief, transportation and energy infrastructure, and universal health care. Armed with Wenz's evidence-driven arguments, progressives can position themselves where they belong: in the mainstream of American politics and at the center of American political conversations, helping their country address a precipitous decline in equality and quality of life.
Our tax system is a mess. And the reason for that mess is, our tax system is incoherent. A well-designed tax system is like a good jigsaw puzzle: all the pieces fit together snugly, so when the whole thing is fully assembled, it forms a coherent picture. But our current tax system is disjointed, with parts that don't logically fit together. That results in inconsistencies, complexity, loopholes, and distorted incentives. We need a tax system that make sense. As this book shows however, making a traditional income tax coherent is an impossible goal. But coherence is achievable if we adjust our target, and complete the switch to a consumed-income tax -- a system that taxes all income, not when it is earned, but when that income is consumed. The move towards a consumed-income tax was begun decades ago, when we first adopted IRAs and other tax-deferred savings accounts. We just needed to complete the evolution. The book explores a variety of tax issues -- among them savings, small businesses, owner-occupied houses, and corporations -- and develops seven groups of recommended changes. These changes would result in a tax system that would be pro-growth, by eliminating the existing disincentives to saving and investment. But the tax system would also remain progressive, with the wealthy taxed as much as and perhaps even more than currently. That combination could make the recommended changes attractive to members of both parties, and might bring to a close the political seesaw in tax policy that we've experienced over that last several decades.
Everyone knows that the current tax system is unfair. Some of the richest people in America pay no tax, while a huge share of the tax burden falls on the rest of us. A mere glance at the tax code confirms that it is far too complex, with volumes of rules that no ordinary person could possibly comprehend. What is to be done? Some conservatives have called for a so-called flat tax. But a flat tax is not necessarily a simple tax, and "flat" means "more" for most taxpayers: a rise in middle-class taxes to finance tax cuts for the rich. Is there another choice? In clear, easy-to-understand language, Edward J. McCaffery proposes a straightforward and fair alternative. A "fair not flat" tax that is consistent and progressive would tax spending, not income and savings. And if it were collected at its lower levels through a national sales tax, most people would not have to file a return. A supplemental tax on spending for the wealthiest individuals would make the national sales tax progressive. Under McCaffery's system, a family of four would pay no tax on their first $20,000 in spending, and 15 percent on the next $60,000. Only the few families who spend more than $80,000 a year would be subject to the supplemental tax. Necessities would be taxed less than ordinary and luxury items. No one would be taxed directly on savings. The estate and gift or so-called death tax would be abolished, for the simple reason that dead people don't spend. The "fair not flat" tax would fall on heirs when and as they spend their good fortune. Perhaps best of all, most Americans would not have to fill out tax returns. Simpler, more efficient, fairer, and more reflective of America's current social values, McCaffery's "fair not flat" tax could help get us out of the tax mess that politicians and special interests have gotten us into, improving the whole country in the process. Read Fair Not Flat to find out how. “In Fair Not Flat, Mr. McCaffery lays out the case for a consumption tax. He does so in a reader-friendly way, presenting his argument with very few footnotes, equations or technical terms. The consumption of the book, so to speak, is not at all taxing. And its argument is well worth pondering.”—Bruce Bartlett, Wall Street Journal
This book presents the views of two distinguished tax experts. Charles O. Galvin proposes a comprehensive tax base with a flat rate of taxation. Boris I. Bittker is reluctant to abandon the principle of progressive taxation. He dissects the proposal from the standpoints of practicality and desirability.
This book assembles nine papers on tax progressivity and its relationship to income inequality, written by leading public finance economists. The papers document the changes during the 1980s in progressivity at the federal, state, and local level in the US. One chapter investigates the extent to which the declining progressivity contributed to the well-documented increase in income inequality over the past two decades, while others investigate the economic impact and cost of progressive tax systems. Special attention is given to the behavioral response to taxation of high-income individuals, portfolio behavior, and the taxation of capital gains. The concluding set of essays addresses the contentious issue of what constitutes a 'fair' tax system, contrasting public attitudes towards alternative tax systems to economists' notions of fairness. Each essay is followed by remarks of a commentator plus a summary of the discussion among contributors.
