![]() ![]() Finally, the data show that the progressive features of the current tax system entail notably higher taxes only for the highest-income people, while reducing the burden on more than 85 percent of American families. In fact, every advanced nation relies substantially on progressive income taxes and in the United States, our increasing reliance on free markets has strengthened the social and economic case for progressive taxation here. Proposals such as the flat tax and a national sales tax suggest that the real issue lies not just in the current code's complexity but in the principle of progressive taxation itself or, more radically still, in government's authority to tax people's incomes at all. Many would-be reformers, however, harbor larger ambitions than closing loopholes and simplifying the system. And by broadening the tax base, simplification allows us to raise the same revenues with lower rates - something that's almost always better for the economy. ![]() The less the tax code influences how people and firms consume, save, earn and invest their income, the more efficiently our markets can allocate the economy's resources. Make no mistake: Drastically simplifying this mess would be sound economics. ![]() Riddled with special-interest loopholes and ineffective middle-class preferences, the federal code is a bloated mess that often operates heedless to the basic tenets of economic efficiency. And the current system provides an easy target. WITH ALMOST the same certainty of death or taxation, the approach of April 15 rouses politicians who see tax reform as the answer for the discontent Americans feel with government and their own economic prospects. ![]()
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