Wednesday, March 22, 2006
Martin J. McMahon, Jr. (Florida) has published Claims of Right: An Income Tax Is Superior to a Wage or Consumption Tax, 110 Tax Notes 1353 (Mar. 20, 2006), also available on the Tax Analysts web site as Doc 2006-4658, 2006 TNT 54-29:
In summary, the case for exempting income from capital from taxation, through either a wage tax or a consumption tax, is based primarily on theoretical economic models that have little predictive value when applied to the real world. Even if those models were correct, shifting to a wage or consumption tax elevates economic efficiency over equity as a paramount criterion of tax policy. Compared with an income tax, either a wage or consumption tax would reduce taxes on those at the top of the economic pyramid and would require increasing the taxes of the relatively less fortunate, with little reason to believe that the before-tax incomes of wage earners will increase by more than their increased taxes. It surely can't be a valid goal of government to increase the welfare of the wealthy few at the expense of the numerous less wealthy.