Discuss Question 24 Discuss Question 22

Discuss Question 23

23. FISCAL WISDOM: Comprehensive tax reform that reduces tax expenditures (e.g. deductions, exemptions, credits and exclusions), while at the same time reducing top marginal tax rates, can generate additional revenues above historical levels and should be a key component of any comprehensive deficit reduction strategy.

ANSWER: True – Most fiscal experts agree that comprehensive tax reform must be a key component of any deficit reduction strategy. It is possible to reduce marginal tax rates, while at the same time reduce tax preferences in a way that results in higher overall revenue compared to historical averages. Comprehensive tax reform can be done in a way that makes the tax system simpler, fairer, more competitive with other nations, and enforceable. For more information on illustrative tax reforms, view the Comeback America Initiative’s Restoring Fiscal Sanity Report.

 

5 Responses to “Discuss Question 23”

  1. James L says:

    Why not reduce expenditures now and leave the top rates intact for a few years? This will cut the deficit faster. The top earners have done very well by the current system and it is quite reasonable to require them to do a little more to keep our society intact.

  2. Delia says:

    Lets eliminate income taxes and the involuntary servitude of working for the government to file anything! Return to the Constitutional era 5% import tariff and no other taxes. This would decrease the cost of doing business in the USA and increase the cost outside to return jobs to the USA and get the government out of the private affairs of Americans. Free country? Where you are forced by force or threat of force to explain how, where and why you spent what to Uncle Sam.

    • Jim Joyce says:

      Questions 22 and 23 are taxing: Delia, you have hit the mark. Gee, the constitutional era. Who in congress is interested in that? Just take the oath, and forget about it. The lost revenues talked about in question 22 are, in fact, from the fiscal tax and monetary system set forth in the U.S. Constitution, and implemented back in those early days/era. Lost are two thirds of the primary revenue sources for the central government of indirect taxes: Imposts, and duties on imports and exports due to free trade. Excise taxes are still collected by the central government. There were no direct taxes upon the heads of the citizenry at all unless the Federal government went to the states to collect them throgh the Apportionment preocess. No Zero bracket or complicated tax schemes to go DIRECTLY into one’s wallet or wealth!

  3. David Rankin says:

    I understand the argument, but it is just that, an argument. I will read your background materials with great interest. To the extent that you’re speaking of federal rates alone, it will not work because states and localities will increase taxes to cover gaps created by cuts. To the extent you’re including states and localities, you need to find a way around the constitution and/or have overcome a massive coordination problem by aligning the behavior of literally thousands of units of government.

  4. Tom Errichetti says:

    As someone from the Northeast we have very high local and state taxes – absent the impact of AMT, I at least get some relief on my federal tax for the hight local and state tax – also given the disparity of income levels I would think more tax rates would be more progressive – the SS tax is severely regressive – and the fact that Hedge fund income is not considered earned means no SS tax or medicare tax

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