Paul L. Caron

Friday, February 24, 2012

Johnson Presents How to Raise $1 Trillion Without a VAT or a Tax Rate Increase Today at Florida

Johnson (Calvin)Calvin H. Johnson (Texas) presents The Shelf Project: How to Raise a Trillion Without a VAT or Tax Rate Increase at Florida today as part of its Graduate Tax Program Enrichment Speaker Series:

Since 2007, the Shelf Project has generated sixty-three proposals, many of which focus on protecting the tax base by reducing or eliminating exemptions, loopholes and shelters-collectively known as tax expenditures. Much of Johnson's scholarship over the years has examined how these tax expenditures introduce inefficiencies. Professor Johnson describes his project as follows:

We should be able to raise at least a trillion dollars a year more revenue within the current income tax system, without a rate hike or a Value Added Tax, largely by making our tax accounting better reflect economic income. Our current system has too many tax pits, which absorb revenue and distort investment decisions. We allow deductions for fictitious losses. 'Taxable income' under our tax accounting does not reach and describe high-class consumption as well as it needs to. Moving toward a more comprehensive income tax base to make it less easily avoided would improve both the fairness and efficiency of the income tax.

Colloquia, Scholarship, Tax | Permalink

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Raising $1T without a tax increase?

When $1T moves from people's pockets to the government, that's not only a tax increase but one which will depress the economy in countless ways. It's silly to pretend otherwise.

Base broadening is a good idea if it's not paired with an implied claim that it's cost-free. I would prefer that tax reform be kept revenue-neutral, and NOT by enacting a large rate increase on its heels.

Instead, how about FIRST raising rates to the level necessary to balance public preferences for benefits and taxation, THEN enacting revenue-neutral tax reform? This approach has a chance of bipartisan support. No other approach to tax reform does.

Posted by: AMTbuff | Mar 5, 2012 12:19:14 PM