Tuesday, February 03, 2004

Tax games

and a look at what real tax reform would be.

"What should be done? Perhaps daunted by deep knowledge of how the cheats work, Johnston is cautious. He considers, and then rejects, shifting to a consumption tax like the flat tax. Sensibly, he leans toward a leaner, meaner income tax, with higher top rates, few deferrals, a broad definition of income and reform of the alternative minimum tax. Add a stiff estate and gift tax to recover from the largest fortunes at death, treat capital gains and dividends as ordinary income, then cut or offset the payroll tax and you would have the elements of a fairer system."

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