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To reduce political corruption, make taxes fair and SIMPLE

September 27, 2012

A friend asked for my reactions to the idea of using a sliding scale for capital gains tax rates:

On the surface, the idea sounds attractive and can easily be defended as sound economics, BUT…

Our political system has become so corrupt that every tax policy discussion becomes nothing more than a battle between the political hacks in both parties and the special interests who support them.

It’s no longer a search for common sense and the overall good of the nation, but rather a win/lose battle over which political “winner” gets the advantage over the “other side”.  America unfortunately loses regardless of which party wins.

Our tax structure is already so complex that big companies and wealthy individuals (who can afford to hire the best “experts”) have a huge advantage over small businesses and the average citizen.

When the typical American can’t even understand the tax code, it leads to widespread distrust of “the system”.  Which in turn empowers the political demagogues who incite class warfare — which puts our nation at risk.

That’s why I’m hoping that fair-minded and non-partisan citizens will eventually demand a SIMPLE tax code:

  1. The  same flat tax rate for capital gains and personal income would be both fair and simple
  2. Fewer  deductions would simplify tax returns, eliminate loopholes, remove opportunities for political favoritism, and allow for lower tax rates
  3. Most importantly, a national consensus along these lines would reduce the opportunities for politicians to enrich themselves at the nation’s expense — thus reducing the political corruption that has unfortunately become so widespread and dominant in America

Yes, solid economic arguments could be made in favor of a sliding capital gains tax — and/or thousands of other such ideas.  And special interests will always be able to find and reward the “experts” who make those arguments convincingly.

But with special interests and their political hacks dominating both political parties — with citizens already overwhelmed, confused and frustrated — and with the nation’s very future at risk — the last thing we need now is more complexity!

Sorry for the rant, but I’m hoping citizens will eventually get frustrated enough to throw out the self-serving politicians in both parties and insist on some common sense and simplicity in our politics — including our tax policies.

You are invited to post your comments — pro or con — here.  And please urge your family and friends to go to this blog and click on “+Follow”.  That’s the only way we’ll change America’s broken politics: by spreading the word one citizen at a time.

One Comment
  1. Rick permalink

    Another argument that may be implicit in your discussion is that differential tax rates lead to economic decision making based on tax favorability rather than sound economic arguments for the investment itself.


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