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April 01, 2002
Here are my thoughts on
Here are my thoughts on taxes. Yes, I just sent in my returns today.
Observe the historical data from the CBO. Corporate income taxes have fallen from 4 percent of GDP in 1967 to just 1.5 percent today. Raise them, and use the savings to cut personal income taxes. Do the same with estate/gift taxes, which have fallen from 0.5 percent of GDP in 1972 to 0.2 percent today.
That would raise the corporate tax revenue intake from $150 billion to $400 billion. Estate tax revenue would rise from $28 billion to $70 billion.
If we use this to reduce personal income taxes, we could lower personal income taxes by $290 billion, a decline of nearly 30 percent across the board - another Reagan-like tax cut!
How should this be implemented?
While at it, we should make the tax system more progressive. This means:
- expanding the EITC (favors lower incomes over upper incomes)
- raising the basic personal exemptions (favors lower incomes)
- lowering the tax rate in the bottom brackets
- making Social Security and Medicare progressive
- eliminating the home mortgage-interest deduction (which favors homeowners over renters)
- eliminating the long-term capital gains tax deduction (which favors investors over workers)
- eliminating the investment-interest deduction (favors speculators over savers)
- eliminating the dividend tax credit (favors shareholders over consumers)
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Posted by Tyrone at 12:19 PM | Comments (0)