By Peter Roff • USNews
Serious people are starting to wonder if tax reform can pass, largely because they’re only talking to people inside Washington.
Instead they should talk to the American people. Most of them are hungry for it. A quarter of small business owners surveyed by CNBC/Survey Money said taxes were the most critical issue they currently face. Overall it’s their No. 1 concern and, since small business is the engine of growth in the U.S. economy, that’s an important consideration.
Things have improved since Election Day 2016, but the economy is still not growing like it needs to if we are to have hope of ever paying down the national debt, now equal to about one year’s U.S. GDP. Continue reading
By Edward P. Lazear • Wall Street Journal
President Trump’s tax plan leaves many details undefined, but there is plenty to evaluate. The administration claims its proposed changes would encourage growth and make the tax system more efficient. History suggests they will.
Less certain is the claim that the tax cuts will pay for themselves. Although budget concerns should always be paramount when cutting taxes, revenue neutrality does little to guarantee that this—or any—administration will exercise fiscal responsibility.
Most economists favor moving away from taxing capital and toward taxing consumption through value-added or sales taxes. Taxing capital squelches growth because capital is mobile and can cross borders in search of the highest risk-adjusted, after-tax return. Economists in both parties have scored the effects of eliminating capital taxation in favor of a pure consumption tax. Estimates range from a 5% to 9% total increase in gross domestic product. Continue reading
by Peter Roff • Washington Examiner
Though America has prospered since the end of the so-called “great recession,” the economy has grown by so little it’s hardly worthy of mention. The boom that began under Ronald Reagan ended with the collapse of the sub-prime mortgage industry. The country is no longer moving. Something must be done to get things going again.
The answer to our problems is simple. America needs tax reform to get moving again. There are a number of good, serious proposals out there from the Hall-Rabuska flat tax to the “Better Way” plan being pushed by House Speaker Paul Ryan. None of them is perfect but they’d all produce lower rates by eliminating deductions and credits. They’d all make the system simpler, and they’d all goose the economy to get annual growth in U.S. GDP where it should be, around three or four percent annually if not higher. Continue reading
IRS tax code totals 2.4 million words and additional regulations total 7.7 million words
by Ali Meyer • Washington Free Beacon
“One often overlooked issue in tax reform is complexity,” the report states. “For decades, the tax code has become more and more detailed, with thousands of additional pages of statutes, regulations, and case law. This added complexity imposes a real cost on the U.S. economy.”
The Internal Revenue Service (IRS) tax code in 1995 totaled 409,000 words and since then it has increased to a total of 2.4 million words.
In addition to the tax code, there are 7.7 million words of tax regulations and there are 60,000 pages of tax-related case law, which accountants and tax lawyers use to decide how much their clients must pay. Continue reading