Monday, September 22, 2008
Glenn Reynolds notes the instability, and perverse incentives, of a tax system that depends so heavily on income tax from a few, while charging many people nothing. I agree, and like the idea of linking tax levels to federal spending. But what will be needed sooner or later is to move beyond the income tax, and replace it fully or partly with a VAT or other consumption tax, something I discussed in my piece on taxes 30 years ahead. And to make sure the incentive to control federal spending remains, the receipts people get at a store should spell out very clearly how much of what they've just paid is going to the federal government.