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Is Putin Being Honest and Accurate about the Benefits of Russia’s Flat Tax?

I’m obviously a big fan of a simple and fair flat tax. In part, my support for fundamental reform is driven by my desire for a low rate, for no double taxation, and for the elimination of loopholes. Those are the economic reasons for reform. But I also am very much motivated by the moral […]

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The Flat Tax, Now More then Ever

On December 24, I wrote that all I wanted for Christmas is a spending cap. Alas, Santa did not manage to stuff that long-overdue policy down my chimney. But I’m not surprised. For years, the flat tax was on my Christmas list and that never happened either. I guess I must have been bad. Or […]

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The “Progressive” Threat to Baltic Exceptionalism

I’m a big fan of the Baltic nations of Estonia, Latvia, and Lithuania. These three countries emerged from the collapse of the Soviet Empire and they have taken advantage of their independence to become successful market-driven economies. One key to their relative success is tax policy. All three nations have flat taxes. Estonia’s system is […]

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Tax Rates, Itemized Deductions, and the Win-Win of Real Tax Reform

While the political world is consumed by the various scandals and baggage of the two main presidential candidates, let’s play a game of make-believe. Let’s pretend that politicians aren’t crooks and clowns and instead actually want to make America’s economy more vibrant and productive so the American people can enjoy higher living standards. What would […]

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Ranking States for Income Taxes and Government Efficiency

There’s no agreement on the most important variable for state tax competitiveness. You could make a strong case that it is the overall share of income taken by politicians in the state. Or you could argue that the tax system for employers is the key metric. And the top tax rate obviously is an important […]

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How Private Social Security Is Helping Hong Kong Deal with Major Demographic Challenges

I’m in Hong Kong for series of meeting and briefings on various economic and policy issues. As you can imagine, I’m a huge fan of the jurisdiction’s simple 15 percent flat tax. It’s basically about as close to a pure flat tax as anyplace in the world. There is zero double taxation of income that […]

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With a Bold and Pure Flat Tax, Ben Carson Sets the Standard for Pro-Growth Reform

When I compared the tax reform proposals of various 2016 presidential candidates last month, Ben Carson got the best grade by a slight margin. But I’ve now decided to boost his overall grade from a B+ to A-, or perhaps even A, because he’s finally released details and that means his grade for “specificity” jumps […]

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Grading Tax Reform Plans

With all of the GOP presidential candidates proposing varying plans to reduce the tax burden and reform the tax system, I’m constantly asked which one is best. But that’s hard to answer because all of the proposals have features I like…as well as some features that leave me underwhelmed, or perhaps even worried. My fantasy […]

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Everything You Need to Know about Deductions, Loopholes, and Special-Interest Tax Provisions

Why does the tax code require more than 10,000,000 words and more than 75,000 pages? There are several reasons and none of them are good. But if you had to pick one cause for all the mess, it would be the fact that politicians have worked with interest groups and lobbyists to create myriad deductions, […]

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Lower Tax Rates vs. Targeted Tax Credits, Part III

Last year, I wrote a column for the Wall Street Journal making the case that families would benefit more from lower tax rates rather than targeted tax credits. My argument was simple and straightforward. Child-based tax cuts are an effective way of giving targeted relief to families with children… The more effective policy—at least in […]

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The Ted Cruz Tax Plan: A Pro-Growth Restructuring of the Internal Revenue Code, but with One Worrisome Feature

The tax-reform landscape is getting crowded. Adding to the proposals put forth by other candidates (I’ve previously reviewed the plans offered by Rand Paul, Marco Rubio, Jeb Bush, Bobby Jindal, and Donald Trump), we now have a reform blueprint from Ted Cruz. Writing for the Wall Street Journal, the Texas Senator unveiled his rewrite of the tax […]

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In One Image, the Case for Ripping Up the Internal Revenue Code

I’m happy that many of the presidential candidates are proposing big tax cuts. Bobby Jindal and Donald Trump have large tax cuts, and Jeb Bush, Rand Paul, and Marco Rubio are proposing smaller – but still significant – reductions in the federal tax burden. All of these plans, to be credible, should be accompanied by […]

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Trump Tax Plan: Pros and Cons

Donald Trump has shaken up today’s craven political establishment like Tom Paine shook up the Tories of colonial America. He has irreverently proposed genuine solutions to the invasion of “illegals.” He has attacked the poltroons of Washington and the talking heads of the media. He speaks rudely and boldly. The question now is, has he also been daring enough to put forth a bold tax reform plan? The answer is yes and no. Trump’s tax plan has numerous great features, but it also has one very bad feature. Let’s examine the good points first, and then tackle the bad aspect of the plan. The Good Features Most importantly, the plan lowers the top individual rate to 25% from the present 39.5%. It then establishes three additional rate brackets of 20%, 10%, and 0%, and it simplifies the overall implementation of taxation by purging numerous arbitrary deductions and exemptions. It also lowers corporate / business taxes to 15% from the punitive 35% presently endured, while eliminating the so called “death tax” and the Alternative Minimum Tax. In addition the Trump plan hopes to bring back approximately $2.5 trillion in cash that American companies have parked in foreign countries. It will be […]

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Microsoft Audit Scandal Shows that Restraints on Abusive IRS Should Be Part of Tax Reform Plans

I’m delighted that so many presidential candidates are talking about partial tax reform and I’ve specifically analyzed the plans put forth by Marco Rubio, Rand Paul, Jeb Bush, and Donald Trump. These proposals all make the tax code less punitive, and that would be good news for job creation, growth, and American competitiveness. But that […]

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Assessing Jeb Bush’s Pro-Growth Tax Plan

In my 2012 primer on fundamental tax reform, I highlighted the three biggest warts in the current system. 1. High tax rates that penalize productive behavior such as work and entrepreneurship. 2. Pervasive double taxation that undermines saving and investment. 3. Corrupt loopholes and cronyism that lure people into using resources inefficiently. These problems all […]

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Estonia Demonstrates that Business Taxation Can Be Simple, Fair, and Conducive to Growth

I’m very fond of Estonia, and not just because of the scenery. Back in the early 1990s, it was the first post-communist nation to adopt a flat tax. More recently, it showed that genuine spending cuts were the right way to respond to the 2008 crisis (notwithstanding Paul Krugman’s bizarre attempt to imply that the […]

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Senator Rand Paul’s Very Good Tax Plan Needs One Important Tweak

Our nation very much needs fundamental tax reform, so it’s welcome news that major public figures – including presidential candidates – are proposing to gut the internal revenue code and replace it with plans that collect revenue in less-destructive ways. A few months ago, I wrote about a sweeping proposal by Senator Marco Rubio of […]

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Fiscal Fights with Friends, Part II: Grading AEI’s Big-Picture Tax and Budget Reform

The American Enterprise Institute has published a comprehensive budgetary plan entitled, “Tax and spending reform for fiscal stability and economic growth.” Authored by Joseph Antos, Andrew G. Biggs, Alex Brill, and Alan D. Viard, all of whom I know and admire, this new document outlines a series of reforms designed to restrain the growth of […]

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Fiscal Fights with Friends, Part I: Responding to Reihan Salam’s Argument against the Flat Tax

In my ultimate fantasy world, Washington wouldn’t need any sort of broad-based tax because we succeeded in shrinking the federal government back to the very limited size and scope envisioned by our Founding Fathers. In my more realistic fantasy world, we might not be able to restore constitutional limits on Washington, but at least we […]

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Tax Reform and the 2016 Election

I’m a huge fan of a simple and fair flat tax. Simply stated, if we’re going to have some sort of broad-based tax, it makes sense to collect revenue in the least-damaging fashion possible. And a flat tax achieves that goal by adhering to the principles of good tax policy. A low tax rate – […]

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