2005-11-01
Simplifying the Tax System
Now maybe Bush can do something that his supporters voted for him to do, in this case, simplify the tax system. Now we'll see if everyone who complains about the tax complexity will be willing to let go of the various special tax breaks that they like, such as mortgage interest and property tax deductions. I don't think that "the American people" are collectively smart enough to understand the benefits of giving up such tax breaks in favor of a simplified system. Afterall, these are "the people" who would rather have empty petro stations during a disaster, so long as the posted price reflects pre-disaster conditions.
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The Federalist Patriot
Founders' Quote Daily
"It is a singular advantage of taxes on articles of consumption
that they contain in their own nature a security against excess.
They prescribe their own limit, which cannot be exceeded without
defeating the end purposed - that is, an extension of the revenue."
-- Alexander Hamilton (Federalist No. 21)
Reference: Hamilton, Federalist No 21
I am excited about this possibility, but bemused at one of the factors attending Bush's wise choise to de-couple this effort from the move to lower taxes. He has specified that proposed simplier tax systems must utilize rates that would generate the same tax revenue as the current convoluted system. What rates would that be? Since a simplier tax system will cause less of an economic drag, we can expect it to have a stimulative effect, in the way that lowering tax rates in an over-taxed enviornment will cause a paradoxical increase in tax revs.
The liberal/leftists always apply the proposed new rate to last-year's financial picture, without accounting for the affect that the new rate will have on the economic picture. An example: Apple sold 1 million iPods for $200 each last year. If Apple doubles the price to $400, it will get twice the revenue next year. In fact, doubling the price will discourage some to not buy; reducing the price to $180 might actually spur more sales and generate more revenue than either (1) leaving the price at $200 or (2) increasing to $220.
I hope that the Bushies argue that a lower rate applied to a better future economic enviornment (due to a simplier tax system) will yield the same revenues as now.
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