Maggie's Farm

I'm opposed to any new income taxes.  It matters little if they are assessed on my income or a much wealthier person's income.  The average person is overburdened.

I feel the same way about corporate taxes, too.  The oddity, in both personal income and corporate taxes, is how little people actually pay and how few of us pay.  There are a myriad of reasons for this.  Loopholes, primarily, but also the manner in which taxes are assessed.  After all, capital gains and investment income are not taxed in the same fashion as earned income, for many good reasons.  It is money at risk, and money at work.  It must be treated differently.

My personal belief is that a flat income tax, with no (or very few) loopholes is transparent, easy to employ, and would reduce the need for a large bureaucracy chasing the average citizen.  It would generate more, or at least equivalent, revenue but not cost the government as much. All told, it's a money saver.  This is a preference that I'm unlikely to ever see, as many people don't fully understand the benefits of a flat tax, in particular its very 'fairness' (a vague term, but defensible in the manner I'm using it).

A flat tax alone probably isn't enough, though.  To truly have an impact and get people focused on longer time frames, I've always felt a Tobin Tax would be useful.  Capital gains taxes would be eliminated and replaced with a Tobin Tax on currency trades and a Transaction Tax on investments.  There are many reasons to not like this, given the nature of Wall Street behavior today.  However, as part of a broad tax overhaul, it would probably yield tremendous results.  Bruce Krasting disagrees, as does the House of Lords.  It's possible this is because the current concept would be to implement a Tobin Tax in addition to the existing tax structure, rather than as part of an overhaul.  As part of a complete restructuring of the tax code, these taxes would focus investors on longer buy and hold periods, reduce High Frequency Trading, stabilize currency exchanges, and generate considerable revenue for the government.  The problem, of course, is the level at which the tax is set.  .03% is perhaps too high.  Then again, OWS would complain it's too low.

It would be intriguing to see someone elected who is willing to alter the tax code so it more naturally meshes with the way business is done today.