Friday, June 5, 2009

Great Analysis

From Curtis S. Dubay (Heritage Foundation, Income Tax Will Become More Progressive Under Obama Tax Plan, June 1, 2009).
A decreasing number of high-income taxpayers are increasingly paying the entire income tax bill. According to the Congressional Budget Office (CBO), the top 20 percent of all income earners paid 86.3 per cent of all income taxes in 2006. This was an all-time high and significantly higher than in 2000, before the 2001 and 2003 tax cuts went into effect.

The linked article (h/t Tax Professor and Instapundit) is very dry, but it does a great analysis of the tax stats and is worth bookmarking for the sources.  Mr. Dubay makes the case for a flat tax.

My personal preference is a national sales tax (with an Amendment to invalidate the 16th Amendment), as it would restore the spirit of the privacy protections of the 4th Amendment and require that no one declare their income to the government (which should be none of their business).

How we solve the progressive tax system is debatable.  The fact that it is broken today and eroding our econonic freedoms and growth is a certainty.


Amendment 16:
Passed by Congress July 2, 1909. Ratified February 3, 1913.

Note: Article I, section 9, of the Constitution was modified by amendment 16.

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

Amendment 4:
The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.