April 18th, 2011 at 8:32 pm
Government Imposes Tax on … Paying Taxes?
You probably don’t need any more sources of gloom on this tax day. But what you do need is an understanding of just how destructive America’s current tax regime is. And for that you couldn’t do much better than the words of conservative economist extraordinaire Arthur Laffer, who writes in today’s Wall Street Journal:
There is a lot more to taxes than simply paying the bill. Taxpayers must spend significantly more than $1 in order to provide $1 of income-tax revenue to the federal government.
To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes.
In a study published last week by the Laffer Center, my colleagues Wayne Winegarden, John Childs and I estimate that these costs alone are a staggering $431 billion annually. This is a cost markup of 30 cents on every dollar paid in taxes.
For those of you keeping score at home, that’s the equivalent of a 30% tax on … well, paying taxes.
January 19th, 2011 at 12:29 pm
CFIF’s Troy Senik Gets Tough on California
Following up on a previous diagnosis of all that ails California, CFIF Senior Fellow Troy Senik is out today with a prescription for the Golden State to get back on the road to recovery.
Senik’s piece in City Journal doesn’t hold out much hope for newly elected Governor Jerry Brown, but the author does shed light on one proposal that might garner enough votes for a simplified tax code:
California would therefore do well to take the advice of economist Arthur Laffer, not just because of his status as one of the authors of Reaganomics but because he is an example of the state’s woes, having packed up his California-based fund-management business in 2006 and relocated to Tennessee. By Laffer’s estimates, if California abandoned its current, highly progressive income-tax system in favor of a statewide flat tax of no more than 6 percent on personal income and net business sales, it could completely abolish all property taxes, state gas taxes, and state payroll taxes, as well as all current state and local sales taxes, without losing revenue. And that’s without factoring in the increased economic activity that such a dramatic change to the tax code would almost certainly generate. This change would once again require the support of a two-thirds majority in the legislature, but its appeal just might be broad enough to attract such a coalition.
Read the entire article here.
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