5 Steps to a Fairer Tax System

Fair is not always simple, but we can go a long way to improving the tax code.  Economist Jaren Bernstein has five strategies to improve fairness in the current system.

1)      Progressive: those with more income pay a larger share of it in taxes;

2)      One that doesn’t exacerbate inequality by giving preferential treatment to the wealthy (e.g., by favoring capital over labor income);

3)      One that doesn’t disproportionately benefit those who are already doing the best at the expense of the rest;

4)      One that raises enough revenue from those with lots of resources to provide a leg up for those at a disadvantage;

5)      One that does not rearrange the pretax income distribution, as in a confiscatory, highly redistributive system;

With special regard to #1, flat taxes are regressive in the extreme.  Most reasonable economists recognize that those who make more need to pay more into the system.  And for #2, this is one I’ve been in favor of for years.  Stop creating preferential loopholes for capital gains, tax it as you would any other income.

And as for that old conservative chestnut that “47% of Americans pay all the taxes,” let’s put that lie to bed.  Forever.


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