Fixing the Economy: The Common Sense Tax
America desperately needs tax reform. Our tax system is unfair, distortionary, wasteful, and a user’s nightmare. Most important, it’s limiting our country’s economic potential.
I, like other academic public finance economists, have thought long and hard about how best to fix taxes. Last year, at www.thepurpletaxplan.org, I proposed a system of low-rate consumption, payroll, and inheritance taxation, which would be a major advance over what we’ve got. It would also be remarkably progressive. The reason is that raising prices, as consumption taxes do, reduces the purchasing power of existing wealth and hits the rich with what amounts to wealth tax.
The Common Sense Tax (CST) is a comprehensive tax reform plan that features just two taxes. One is a payroll tax paid by employers that taxes all labor earnings at a flat 13 percent tax rate. The other is a personal income tax, which taxes household incomes above $100,000, in the case of married households, and above $50,000 in the case of single households, at a single 25 percent tax.
The reform is designed to be revenue neutral and progressive. It would eliminate annual tax filing for over two thirds of American households and kick start our ailing economy, primarily by eliminating the corporate income tax, whose burden arguably falls on worker...Read more
Encouraging Work & Saving
In addition to being simple, transparent, and fair, the Common Sense Tax would improve incentives to work and save, eliminate an entire army of corporate and personal tax accountants and lawyers, and, as indicated, make April 15th just another day for most Americans. And for those who do need to file, the tax return would fit on a postcard. Most important, the Common Sense Tax would help grow the economy and provide, at long last, the American people with a tax system it understands, respects, and deserves.
Helping Lower & Middle Class Households In These Difficult Times
By setting high thresholds for taxable income, the Common Sense Tax would instantly end the income taxation of all households of low or modest means. In combination with the Common Sense Tax’s payroll tax reform, such households would get what they desperately need – more money to spend, save, and invest in these difficult economic times.
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The mission of the Common Sense Tax organization is to promote a comprehensive tax reform plan known as the Common Sense Tax.