Path to Prosperity: Pro-Growth Tax Reform
Originally Posted by Gargantuan
A pro-growth tax system should be simple, efficient and fair. The U.S. tax code fails on all three counts. The system is notoriously complex, as individuals, families and employers spend over six billion hours and over $160 billion per year trying to negotiate a labyrinth of deductions and credits, a tangle of different rules for characterizing income, and a variety of schedules for taxing that income. Simply put, the code is too costly and too burdensome.
The code is also patently unfair, as many of the deductions and preferences in the system – which serve to narrow the tax base – are mainly used by a relatively small class of mostly higher-income individuals. Washington should not be in the business of picking winners and losers. Finally, the U.S. tax structure is highly inefficient, as tax considerations rather than economic fundamentals often distort individual decisions to work, save, and invest, which leads to a misallocation of resources and slower economic growth.
This budget attacks all three of these problems with a set of fundamental reforms drawn from a broad consensus of economic experts and based on the principle that government should never take a dollar from one of its citizens unless that dollar is needed for an absolutely vital national purpose. It draws on the commonly held view that the key to pro-growth tax reform is lowering tax rates while broadening the tax base – that is, letting individuals keep more of the money they earn, while getting rid of distortions, loopholes and preferences that divert economic resources from their most efficient uses...