Friday, November 30, 2012

X tax makes big time [updated]

David Brooks writes about the X tax in today's NY Times: "Let's Talk About X." This is not an unfamiliar topic to readers of this blog, and more info can be found here and here.

UPDATE 12:26 PM: Not surprisingly, Brooks' piece is getting comments to the effect that it's unfair and unprogressive to tax wage income but not investment income. Brooks mentions in passing that the X tax includes a tax on business cash flow; not mentioned, and easily overlooked, is that this feature is crucial to making the X tax a progressive tax (along with its progressive wage brackets). The people who own big stakes in business are, for all intents and purposes, the rich. Having said that, I note that there are various ways to do a progressive consumption tax, some of which don't have the "optics" problem of giving an inaccurate perception of being a windfall for the rich.

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