November Election Provides Unique Opportunity for Tax Reform
Tax Foundation President Scott Hodge recently published an article in the Heartland Institute’s Budget & Tax News on the opportunity for federal tax reform during the next administration—regardless of who wins. The article outlines five basic steps for politically realistic tax reform:
Step 1: Eliminate tax exemptions and deductions.
Step 2: Make any tax reform a tax cut and tax simplification.
Step 3: Continue to shield low-income earners with a super-deduction.
Step 4: Make everyone a stakeholder.
Step 5: Fend off the special interests.
Below is an excerpt from the article, and the full version can be found here.
For the first time since 1986, the stars may be aligning for a grand bipartisan compromise on fundamental federal tax reform.
Regardless of who wins in November, the next president and Congress will have to deal with the collision of two cataclysmic tax events: The 2011 expiration of the Bush tax cuts and the growing irritation of the Alternative Minimum Tax (AMT).
The seeds for compromise lie in the fact that both sides have something to gain by addressing these problems at once. Naturally, Republicans want to avert the largest tax hike in history by maintaining the lower tax rates on income, capital gains, dividends, and married families with children. Meanwhile, Democrats will be brought to the table by the fact that the AMT is largely a Blue State problem, mostly affecting those living in high-tax and high-income states such as California, Massachusetts, New Jersey, and New York.
Don’t let Congress fool you into thinking that the FAIRTAX is bad for you. It’s bad for them, because it puts control of taxation in OUR HANDS, not theirs! Bailouts of any kind would be impossible. As a matter of fact, they would be unnecessary. We would never have been in this mess.
It’s good for us because we would be able to keep 100% of our wages, and they would only be able to increase taxes by keeping wages higher. Higher wages means more money to spend, which means more revenue!