Republicans Can’t Be Trusted with Tax Reform
April 18, 2017 2 Comments
Fundamental tax reform such as a flat tax should accomplish three big goals.
- Lower tax rates in order to encourage more productive behavior.
- Get rid of double taxation in order to enable saving and investment.
- End distorting preferences in order to reduce economically irrational decisions.
The good news is that almost all Republicans believe in the first two goals and at least pay lip services to the third goal.
The bad news is that they nonetheless can’t be trusted with tax reform.
Here’s why. Major tax reform is based on the assumption that achieving the first two goals will lower tax revenue and achieving the third goal will generate tax revenue. A reform plan doesn’t have to be “revenue neutral,” of course, but politicians would be very reluctant to vote for a package that substantially reduced tax revenue. So serious proposals have revenue-raising provisions that are roughly similar in magnitude…
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