Wednesday, February 06, 2008
One of the things that bemuse me, and I am borrowing liberally from Justin Fox of the Curious Captalist, is why we don't try to replicate the 1986 tax reform. The 1986 tax reform flattened the tax system significantly, thus pleasing conservatives (created two income brackets 28% and 14%), and treated all income the same (capital gains 28% just as income) and got rid of slews of tax breaks. The net result was a revenue positive tax reform that lowered tax rates, all parties were pleased. I don't know if this would be the best policy but it seems preferable to most other options that have been presented.