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One of the problems we have in talking about tax reform today is that we start with an enormously complicated, deeply flawed, existing tax structure.
If we were starting from scratch, it would be easy. You would want to keep the tax system as simple and unobtrusive as possible while avoiding the elements which discourage the behaviors that spur growth. Income taxes and taxes on investment, for example, discourage the very behavior -- work and savings -- that are essential to a growing, dynamic economy. Therefore, a consumption tax (a Value-Added Tax or sales tax) would be a better system, and could be designed so that those with lower incomes receive additional support or exemptions from paying those taxes.
However, given what we have today at the federal level--a highly progressive tax system on income, investment, and corporations—we'd be better off focusing on simplifying the code by removing loop holes and then lowering the overall tax rate.
Independent Women's Forum director and Goldwater Institute senior fellow, Carrie Lukas
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