A Modest Proposal to Reform the American Tax System

The tax code has become incomprehensible, treats people of equal means in unequal ways, discourages the creation of jobs and discourages work, is very costly to comply with, and does not encourage investment. This book sets clear criteria to judge the quality of any tax system, analyzes the US federal taxes on people and business, shows who gains from many of the current weaknesses of the tax system, and makes a comprehensive reform proposal. The reform proposal includes the elimination of the payroll tax and funding of social security from the budget, simplification of the personal income tax, making it truly a tax on individuals, eliminating almost all tax deductions, and exempting the first $25,00 in income from taxation. The tax on businesses is only imposed on the payment of dividends rather than profit and reinvestment is strongly encouraged. The proposed new tax system will lower taxpayer compliance costs, encourage investment, job creation, and economic progress.