Paul L. Caron
Dean




Tuesday, April 17, 2012

Dorothy Brown: The Progressive Case for Repealing the Progressive Tax Rate System

CNN, Let's Kill the Progressive Tax Rate System, by Dorothy Brown (Emory):

We do not have a progressive tax system. The notion of a progressive tax system is the lie that has been perpetuated far too long.

First, not all income is taxed the same....

Second, not all deductions are treated the same. ...

Third, all of this is supposed to be a secret. The only reason we have the information is because taxpayers voluntarily disclosed it -- either because they are presidential candidates or concerned citizens such as investor Warren Buffett. The IRS statistics do a great job of masking this information because the real problem lies within the top 1% of taxpayers, and the data are not presented in a way that isolates that group.

Congress decides to enact a tax law, and the president signs the bill. While presidents voluntarily release their tax returns, members of Congress do not. The first step toward real tax reform would be for every member of Congress to release his or her tax return. We can see which tax provisions benefit them, and we can compare their effective tax rates with our own. ...

Achieving meaningful tax reform will require very few steps.

First, tax all forms of income at the same rate. Second, repeal the progressive tax system and enact a flat tax. If a flat tax is good enough for Mitt and Ann Romney, it should be good enough for the rest of us.

Most flat tax proponents, however, want a flat tax, but they want to exempt income from stock completely. That would mean Mitt and Ann Romney's already low 15% effective tax rate would be cut even further. That would be wrong-headed tax reform.

Finally, most deductions should be eliminated. Most taxpayers do not itemize, so this change would only affect about one-third of taxpayers -- and their accountants and tax lawyers.

Whenever Congress enacts a deduction, it creates winners and losers. That must stop. To be sure, every special interest group will oppose even the hint of this suggestion. But we outnumber them.

I don't think it's fair that the richest Americans pay taxes at a lower rate than most taxpayers and neither should you.

https://taxprof.typepad.com/taxprof_blog/2012/04/dorothy-brown-.html

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