Paul L. Caron
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Saturday, October 17, 2020

The Best Stimulus: 0% Income Tax

Wall Street Journal op-ed:  The Best Stimulus: 0% Income Tax, by Stephen Moore:

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

Instead of spending the money, why not cut out the government middleman and not collect the taxes? In 2020 the personal income tax was expected to raise $1.81 trillion and the corporate income tax $260 billion, for a total of $2.07 trillion. For a little more than $2 trillion, Congress could suspend the personal and corporate income tax for a year.

Some 100,000 American corporations would see their tax rate fall from 21% to zero. For 12 months the U.S. would have the world’s lowest corporate tax in the world, boosting profits and stock values and attracting capital. ...

Liberals will complain that the benefit would disproportionately go to the wealthy. But the people who pay the most income tax are those who own and operate the businesses that employ tens of millions of Americans.

Income-tax reductions have always had positive repercussions for the economy. That was true in the 1920s, 1960s, 1980s and 2010s. Suspending the income tax altogether would give the economy a far stronger shot in the arm than another borrow-and-spend stimulus.

https://taxprof.typepad.com/taxprof_blog/2020/10/the-best-stimulus-0-income-tax.html

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Comments

The best stimulus: print money.

Posted by: Ted Seto | Oct 17, 2020 11:21:17 AM

I assume all government operations will then be financed by borrowing and excise taxes. Seriously?

Posted by: Talbert Michael | Oct 18, 2020 7:49:05 AM

B/c almost half of taxpayers pay no income tax and those are the ones whose vote# politicians are trying to buy- the lols want to say “look at what I got you!”

Posted by: Mm | Oct 18, 2020 7:58:09 AM

MM, under yet another variation of his name, scribbles:

"B/c almost half of taxpayers pay no income tax "

But enough about Donald Trump...

Posted by: Unemployed Northeastern | Oct 18, 2020 5:35:44 PM

@Talbert,

I believe the *thinking* here is that in the ultimate manifestation of the Laffer Curve, zero taxes will result in infinite tax revenue. I can't wait to see Moore's take on perpetual energy machines!

Posted by: Unemployed Northeastern | Oct 18, 2020 5:36:42 PM

Someone wrote an entire free online book in 2016 about how 0% income tax could be possible by 2025 by funding government with QE :

https://atom.singularity2050.com/

Posted by: Tester | Oct 19, 2020 10:42:11 AM

"I assume all government operations will then be financed by borrowing and excise taxes. Seriously?"

You should learn history. For most of the republic's existence the income tax didn't exist and during that time, the US became an economic and military powerhouse. The idea that we need an incredibly powerful government heavily financed by the American worker inverts the very basis of our political system. By design, by the way. Sadly, people like you actually believe that inversion is a good idea.

Posted by: Ken | Oct 19, 2020 10:46:12 AM

When I saw the article headline in the WSJ, I thought it would be a satirical story until I saw who wrote it.

Posted by: PaulB | Oct 19, 2020 1:24:33 PM

President Trump pays his taxes through his companies, not as an individual, like MOST business owners. He paid over 25 million.

Posted by: Teresa | Oct 19, 2020 3:21:15 PM

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