Tackling Taxes
04/18/2012 | | IRS, Principles of tax reform, Reform the IRS, Tax Reform, lower marginal tax rates, tax bad things, tax consumption
With tax reform in the air here are three principles economists want reform based on. 1) Broaden the base and lower rates. Lower marginal rates distort behavior less. 2) Tax consumption not income. Taxing income discourages savings, investment and work. 3) Tax what you don’t want because taxes reduce the supply of whatever is taxed. If you don’t want cigarettes tax them more, same with gasoline and sugar cereals.