This page was last updated on July 10, 2011.
Just a dent; Editorial; Beaver County Times; July 10, 2011.
Below is a detailed critique of the subject editorial.
“Kansas City Star columnist E. Thomas McClanahan reports economists at the National Bureau of Economic Research has [sic] proposed limiting how much a taxpayer could claim in total credits and deductions.”
[RWC] You can find the McClanahan column here and the NBER paper here.
“Under their plan, a cap of 2 percent of total income would produce $278 billion a year in additional revenue. A 5 percent cap, with more deductions, would bring in $110 billion.”
[RWC] These figures represent federal income tax increases of about 25% and 10%, respectively.
“While significant, that only makes a dent in the debt.”
[RWC] However it’s done, this proposal attempts to increase tax revenue by increasing the effective tax rate. Repeating what I wrote in my critique of companion editorial “Closing tax loopholes,” “a skunk by any other name still stinks.” The best way to increase tax revenue is via an expanding economy, and higher tax rates work against that goal.
© 2004-2011 Robert W. Cox, all rights reserved.