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Tax Reform V: Eliminate the Estate Tax »

The estate tax amounts to a penalty on the heirs of those who have accumulated wealth over their lifetimes. It raises less than 1% of federal revenues, so it provides almost no benefit to anybody, but imposes a big cost on a few. There are many ways for the wealthy to avoid the estate...
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Tax Reform IV: Corporate Tax Reform »

The United States has one of the highest corporate income tax rates in the world. While both the Obama administration and Trump administration have criticized American companies for moving operations off-shore, and considered a variety of policies for punishing them if they do, a better approach would be to design policies that make it...
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Tax Reform III: Tax Employer Health Care Benefits; Offer a Tax Credit to Health Insurance Purchasers »

In an earlier blog post I suggested eliminating all personal tax deductions, with a possible exception related to health care. One of the well-publicized problems with the American health care system is that employer-provided health insurance is not taxed, pushing us to a system in which people get health insurance from their employers. A...
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Tax Reform II: Lower Rates; Eliminate Deductions »

As Congress considers tax reform, the focus on the personal income tax should be to lower rates and eliminate all deductions except for a standard deduction that applies to everyone. Lower rates enough to offset the increased revenue from eliminating deductions, and set the standard deduction at a level that raises the same amount...
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Tax Reform I: Expand the IRA »

As Congress turns its attention to tax reform, one desirable change would be to expand the availability of IRA accounts to more taxpayers, with higher limits, and for purposes other than retirement. I’ll follow up with more tax reform recommendations in later posts, and apologize for making my first suggestion a somewhat technical one....
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Prosperity, Not Soda Taxes, Fosters Good Health »

Berkeley’s soda tax is being trumpeted as a success because a new study finds that purchases of sugary soft drinks fell by 10 percent in the city from March 2015 to February 2016. Of course, soda-tax advocates claim that the penny-per-ounce excise tax, which took effect in 2015, is fully responsible for the drop....
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Interest Groups and Tax Reform »

In a recent post in The Beacon, I said that President Trump’s tax reform proposal is a move in the right direction. But I find part of it very troubling: He wants to keep the mortgage interest deduction and the deduction for charitable contributions for individual taxpayers. Both of these deductions have reasonable justifications,...
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Trump’s Tax Plan: A Move in the Right Direction »

President Trump released an outline of changes he hopes to see in the federal income tax. If his proposal became law, we would have a better tax system than we do now. One major change would be reducing the corporate income tax rate from 35% to 15%. The US has one of the highest...
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Trump’s Tactic Is Certain to Create “Regime Uncertainty” »

President-elect Donald Trump’s so-called Carrier deal, which seems to amount to a threatening conversation he had with Carrier’s managers, combined with some tax concessions by the state of Indiana, exemplifies the approach he has more or less announced he will take in dealing with U.S. companies that propose to move operations abroad. He threatens...
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Tax Reform for Investment Income »

Executive Summary The unexpected election of an at least nominally Republican president, along with Republican control of both Houses of Congress, presents a unique opportunity for the incoming Congress to make meaningful reforms to the tax system. One major problem has been the over-taxation of corporate income. Another is the under-taxation of carried interest....
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