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Most of the Republican candidates for president have published their tax reform policies. Unfortunately, they reflect Republican orthodoxy on tax policy much of which does not appear to be valid based on trends over the past 30 years. Moreover, the tax policies have greatly contributed to income inequality over this time period.
President Obama and the Democrats will likely win the argument on fairness, because the facts are on their side. For the same reason, they will likely win the argument that tax policy has contributed to the large income inequality that has occurred over the last 30 years.
The continuation of this post discusses aspects of the Republican orthodoxy that need to be examined and validated. If not valid, the tax policy should be revised to provide competitiveness for business and fairness for taxpayers.
Don Nordeen
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Continue reading Letter to Republican Presidential Candidates re Tax Policy.
- Key Words: economy, tax policy, income inequality, corporate tax, personal income tax
Letter to Republican Presidential Candidates re Tax Policy (continued)
To: Republican Presidential Candidates
Please forward to the economy and tax policy advisers.
Dear Adviser:
Re: Tax Policy
Like other Republicans, the tax policy advocated by Republican candidates are focused on business and seems to ignore the indirect effects (side effects) of the tax policy. Typical is the op-ed in the 2012 Mar 14 Wall Street Journal, Hassett and Hubbard: Romney vs. Obama on Corporate Tax Reform. Mr. Hassett is director of Economic Policy Studies at the American Enterprise Institute. Mr. Hubbard, dean of Columbia Business School, was chairman of the Council of Economic Advisers under President George W. Bush. He is an economic adviser to Mitt Romney.
While the op-ed is clearly focused on corporate tax, the indirect (side) effects on income inequality are not discussed. However, the indirect effects are significant.
Income inequality has increased significantly during the past 30 years. As a result, President Obama and the Democrats will likely win the argument on fairness, because the facts are on their side. For the same reason, they will likely win the argument that tax policy has contributed to the large income inequality that has occurred over the last 30 years.
I believe it is possible both to improve the competitiveness for business, and to be fair to all taxpayers. But to do so, corporate and personal tax policies need to be considered simultaneously. But policy advisers will have to "think outside the box".
For example, double taxation on interest and dividends can be eliminated by making interest and dividends deductible where paid and income where received. In this scenario, the elimination of the double tax would benefit the corporations paying dividends which should improve competitiveness and result in lower product prices to consumers. This would also place debt and equity financial on similar bases.
Preferential tax rates on capital gains, carried interest and other special incomes are not needed if the personal tax rates are lower with fewer tax expenditures.
I have posted many ideas on the internet:
- On the Agenda for Congress: Tax Reform Plus
- Capital Gains, Economy and Income Inequality
- Debt and Deficits are a Potential Disaster
- Double Taxation on Dividends
Sincerely,
Donald L. Nordeen
Gaylord, MI 49735
- History: Changes are usually identified in the text with the date which facilitates searching by date. Edits are usually noted by add and
deletechanges. - 2012 Mar 14 — Initial Post
- Links: Letter to Republican Presidential Candidates re Tax Policy at [http://curntbk.blogspot.com/2012/03/letter-to-republican-presidential.html]
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Copyright 2005-2012 © Donald L. Nordeen. All Rights Reserved. See Copying Posts on This Weblog.
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Copyright 2005-2012 © Donald L. Nordeen. All Rights Reserved. See Copying Posts on This Weblog.
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