Wednesday, July 20, 2011

Tastes in Tax Policy

I confess that I like the broad outlines of the Gang of Six plan.  I don't have a problem with people like me having to wait longer to retire, so long as people who do physical labor get held harmless. 

It occurs to me that I care about substantial progressivity at the bottom of the income distribution (and I am a big fan of the Earned Income Tax Credit).  To calculate progressivity, one needs to take into account ALL taxes, including FICA and state and local taxes.  I also need to think about Mark Thoma's point about the progeressivity of both taxes and benefits--maybe Europe is onto something in using regressive or proportional consumption taxes to finance a strongly progressive safety net.  I suppose the question is whether getting progressiveness out of taxes or spending produces less dead-weight loss.

But once income reaches a certain threshold ($100K per year?), proportional taxes are just fine with me.  A reasonablly flat rate structure with an earned income tax credit, few deductions, and a large exemption would do the trick.


1 comment:

davelindahl said...

So keep in mind that if you are simply listening to get more interest than the bank will ever give you then Tax Liens are the great choice and if you love controlling the property and being property owner is your ambition then Tax deeds are the best one. DAVID LINDAHL says that, Tax Lien or Tax Deed? This query occurs a lot among traders eager in Tax crime real estate investment.