op-ed on presidential tax plans
Got an op-ed in the Providence Journal (free registration required) and some smaller papers in the last few days comparing the Bush and Kerry tax plans:
For those of us who aren’t tax lawyers and accountants, how should we choose between tax plans this November?
One way is to ask the common sense question, “What makes a good tax?” and then compare plans to that ideal. Thankfully, economists over the years from Adam Smith to Milton Friedman have done this for us, and have boiled down their tax wisdom into five simple rules:
Simplicity: Taxes should be easy to understand, and easy to pay.
Transparency: Taxpayers need to know the cost of government in a democracy. Taxes shouldn’t be hidden or misleading in their impact.
Stability: Good economic decisions require stable “rules of the game.” Tax law shouldn’t change continually or apply retroactively.
Neutrality: Taxes should aim to raise revenue without economic distortion, and shouldn’t attempt to “socially engineer” the economy.
Growth-friendliness: Taxes should consume as small a part of national income as possible, and shouldn’t interfere with trade or capital flows.
Nothing groundbreaking here—just a reminder that economists broadly agree on basic rules for “good” taxation, and framing debates in terms of them lets people talk sensibly about tax policy without pulling out the ideological clubs.
See also the short version from the Myrtle Beach Sun News.
Posted by Andrew on Tuesday August 24, 2004 | Feedback?
