What kind of tax system is most effective?
The most effective tax system is to choose a number, preferably a fairly low number in the range of 15%, and have people fill out their taxes on a postcard. They would list the amount of money that they earn, then calculate and send in 15%, and keep the balance. Author, Commentator and President of The King's College, Dinesh D'Souza |
The absolute worst type of tax is an income tax because, in effect, it's a tax on people for working, producing and investing, based not on what they take out of an economy, but what they put into it. The problem with this is twofold: Firstly, taxes levied against a particular behavior end up discouraging that behavior, in this case, working, producing and investing. Secondly, because an income tax makes no distinction between, for example, income used to buy luxury goods and income saved and invested in starting or growing a business, it naturally reduces the amount of money which is available to be invested. The best alternative is to tax people based on what they spend, in the form of sales taxes which are levied against goods that individuals consume. Not only is this better for an economy, it's easy to implement because businesses - who already keep records - can simply pass on the cost directly to consumers. Economist, investment advisor, author and commentator, Peter Schiff |
The purpose of taxation is to fund the activities of government, so defining the proper role of government will naturally determine the amount of money required to fund these activities and the kind of tax system necessary to generate it. Under the United States constitution, the role of the federal government is to act as an impartial, neutral broker whose responsibilities are to protect life, liberty and the pursuit of happiness, which means administering justice, enforcing contracts and ensuring national and individual security. President of the Center for Urban Renewal and Education, Star Parker |
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. Independent Women's Forum director and Goldwater Institute senior fellow, Carrie Lukas |
Economists look foremost for efficiency in the tax regime. Efficient taxes are those which have the least effect in diminishing output as a result of their disincentive effects. Unfortunately, the most efficient taxes are often the most inequitable so governments must seek a compromise. They must also consider the ease of avoidance of taxes and the costs of collecting them. With the rise in importance of adverse environmental effects of human activity there are increasing opportunities for taxes which unequivocally increase well-being because they both raise revenue for government and, at the same time, discourage environmental damage. A good example would be a tax on carbon emissions. Professor & Head of QUT's School of Economics and Finance, Tim Robinson |
The simpler the tax system is, the better, otherwise it quickly become a vehicle for social engineering or other schemes (through the use of things like tax deductions and tax credits), rather than simply a way to raise revenues for the government. Contributing editor of City Journal and Manhattan Institute senior fellow, Steven Malanga |
Clearly current tax law is too detrimental to the health of our economy. For more than 10 years, NTU has tracked this problem through our study, A Taxing Trend. Vice President of the National Taxpayers Union, Pete Sepp |
The flat rate consumption tax would have the least distortive effect per dollar of revenue raised. The problem with something like that is that it leads to making government look less costly and so the historical experience, particularly in Europe, is that the absolute size of government is very much a function of what their flat rate is and I think if we move toward a flat rate consumption tax (VAT) that we would need to have an independent process to approve an increase in the size of government that requires a larger approval, maybe two thirds of the vote in Congress or approval by number of states. Given the nature of our current tax system in the United States, cutting tax rates increases the amount of money that people want to spend (and the relative size of government) because it reduces the visible taxes on the current generation of voters. Cato Institute Chairman Emeritus and Senior Economist, William Niskanen |
One in which marginal tax rates are not so high that they distort incentives, and one that is not so complex that it micromanages behavior or creates inordinate burdens of compliance. Editor of FutureOfCapitalism.com and author of "Samuel Adams: A Life", Ira Stoll |
The broadest base with the lowest rates to raise only enough revenue to fund the necessary functions of government passing stringent cost-benefit criteria. Professor of Economics at Stanford University, Michael J. Boskin |
The simplest possible structure with the lowest possible rates. President of H. C. Wainwright and Company, Economics, David Ranson |
All prosperous societies require a government willing to invest in infrastructure, education, medical and scientific research, and nascent technologies, as well as prudent regulation of markets and industries related to health and safety. Author, commentator and lead Bloomberg View columnist, Jonathan Alter |