The Case for the FreedomTax Is Still Strong and Compelling

The FreedomTax would reform the entire system of taxation, modernize it, make it tax-efficient, and redesign the tax into a true income tax. This modernization would make the income tax no longer prone to the frequent ad hoc tax-law changes. … Continue reading

Moving from Tax Cuts to Fiscal Reform

Any discussion of fiscal reform must start with a truth that is seldom heard. The purpose of taxation is to generate the revenue needed to pay the government’s bills. In the face of rising deficits, even in good times (leaving … Continue reading

The Tax-Mess Rejiggerment Act of 2018 and the Promise Made to Sell It

The Tax-Mess Rejiggerment Act of 2018 and the Promise Made to Sell It

Dissention is high in the ranks; therefore, the bold promise (also made with the Brady-Ryan “Better Way” Plan) that the income tax will be so simplified that the average taxpayer will only have a postcard-like tax return to file. Will … Continue reading

Thoughts on a Pro-Growth National Tax Reform Program

Thoughts on a Pro-Growth National Tax Reform Program

President Trump’s tax reform program is in stark contrast to critics on the Left who still want a tax system that redistributes income to those who will be denied opportunity by an ideology that deplores capitalism, fears economic growth, and … Continue reading

Not Just Another Flat Tax

Not Just Another Flat Tax

Low-rate taxation would markedly increase after-tax returns, thus fostering saving, investment, and overall business expansion and, in turn, job and wage growth. There’s a lesson in the FreedomTax – The nation doesn’t need tax reforms with still too-high tax rates … Continue reading

Why Income Tax Reform Is So Difficult

Why Income Tax Reform Is So Difficult

Ask yourself: Why can’t the income tax be made as simple and compliance easy as paying the federal motor-fuel tax? The motor-fuel tax does not require personal motorist tax returns to be filed to collect the tax, nor are there … Continue reading

Real Income Tax Reform Is Not About Inventing a Better Mouse Trap

Real Income Tax Reform Is Not About Inventing a Better Mouse Trap

The Border Adjustment Tax (BAT) proposed by Congress is intended to change how business income is taxed giving it features of a Value-Added-Tax (VAT), a cash-flow tax, and a consumption tax. The idea is to make the corporate income tax function as a quasi-VAT and less as an income tax on the earnings of U.S. producers. Clearly, violative of free trade principles affecting the U.S., the practice should be made the subject for U.S. trade re-negotiation, a challenge fully backed by the new Administration. This is a fair trade problem, not a problem about income taxation. The BAT “solution” makes for new problems. On several fronts, a BAT for the U.S. is likely to make matters worse. The driving force behind the BAT is the expectation that it will generate considerable tax revenue… Continue reading

Person Taxation: The Root of the Income Tax Mess

Person Taxation: The Root of the Income Tax Mess

Taxing all income the same opens the door to a far-reaching revolutionary reform. Under the single-rate FreedomTax, the tax will be levied, collected, and paid at the source of payment in the case of many forms of income – dividends, … Continue reading

Death to the “Death Tax”

Death to the “Death Tax”

The Death Tax is a product of the politics of envy and notions of wealth redistribution. As a killer of economic and job growth, the Death Tax deserves a speedy execution. Its confiscatory nature amounts to a government grab of … Continue reading

Are Capital Gains Income?

Are Capital Gains Income?

The history of taxing capital gains as income stems from a dubious, and at the time much criticized, Supreme Court decision that reversed prior Supreme Court decisions holding capital gains not to be income. Job changes are not “income” transactions. Nor, are changes in capital. Income is what “comes in” from having the job, just as it’s what “comes in” from having the investment of capital; e.g., dividends, interest, rents, and including business income. Indeed, capital gains are not considered to be income by economists, who exclude them from their computations of GDP. The exclusion is because capital gains are not income in the economic sense. Continue reading