JBD

Jim Manzi at NRO pours cold water on Dr. K's net-zero tax plan. Manzi rocks, as usual, and that's no mean trick pulling down the pants of a careful braino like Krauthammer.

Manzi rightly outlines the biggest problem with tax tinkering - the ideas always start out small and simple, but then rapidly get complicated by exceptions and allowances. Then before you know it, the original trade- off deal is lost in the weeds, and you end up with both taxes higher than you originally started with. This is how "temporary" sales taxes for things like emergency repairs after natural disaters end up being permanent. Government will not give up tax money without a big fight.

What I like about Krauthammer's idea is making taxes based on sales and consumption, rather than on income, profits or capital gains. I think all taxes should be collected this way. You know up-front what the final total cost is, and you also have a direct daily reminder of what government actually costs you. So there is no hassle and expense of trtacking deductions and credits, and any increases are immediately felt, which would act as a restraint against unnecessary increases.

I believe there should be a consitutional amendment that limits total takes collected by local, state and federal government. This limit could be a percentage of GNP, or an inflation-adjusted per capita amount. Next year's budget is limited to what is collected this year. States and countines should be the only tax collectors, and the fed should get their money from the states on a flat per-capita rate. That way senators and congressmen will go to DC looking for ways to keep mony away from the Fed, rather than spending all their time traying to get it back.

Posted by: JBD at 06:21 PM | No Comments | Add Comment
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