Consider the next taxation reform:
1. Impose a retail sales taxation on consumer goods together with services, both domestic together with imported.
2. Use to a greater extent than or less of the proceeds from the taxation to repeal the corporate income tax.
3. Use the residual of the proceeds from the taxation to significantly cutting the payroll tax.
Before moving on, inquire yourself: Do yous similar this plan?
As I empathise it, this innovation is, in effect, what the Republicans inward Congress are proposing.
Note the words "in effect." There are a few differences, which are to a greater extent than of import administratively than inward their economical effect. One is that the consumption taxation is non collected at the retail score but rather along the chain of production (much similar a value-added tax). Once this is done, yous ask edge adjustments to ensure the taxation is actually similar a retail sales tax: imports must endure taxed, together with exports convey to instruct a rebate. In addition, the payroll taxation is non cutting but rather firms instruct a deduction for project payments, but that deduction is much the same every bit a payroll taxation cut.
Personally, I similar the three-point innovation listed above, together with I hence similar the reform proposal beingness discussed inward Congress. H5N1 lot of confusion close things similar edge adjustments powerfulness disappear if commentators realized that what is beingness discussed is largely equivalent to this three-point plan.
Addendum: I don't intend it is quite correct to say, as Paul Krugman does, that this innovation is a shift from taxing profits to taxing consumers. That ignores business office 3 of the three-point plan. It is to a greater extent than accurate to order it is a shift from taxing profits to taxing consumed profits. Moreover, I intend the reform would promote economical increase together with rise living standards. H5N1 large literature suggests that taxing consumption is preferred to taxing income, specially uppercase income. So a shift from a profits taxation to a consumed profits taxation is a pace inward the correct direction. Sumber https://gregmankiw.blogspot.com/
1. Impose a retail sales taxation on consumer goods together with services, both domestic together with imported.
2. Use to a greater extent than or less of the proceeds from the taxation to repeal the corporate income tax.
3. Use the residual of the proceeds from the taxation to significantly cutting the payroll tax.
Before moving on, inquire yourself: Do yous similar this plan?
As I empathise it, this innovation is, in effect, what the Republicans inward Congress are proposing.
Note the words "in effect." There are a few differences, which are to a greater extent than of import administratively than inward their economical effect. One is that the consumption taxation is non collected at the retail score but rather along the chain of production (much similar a value-added tax). Once this is done, yous ask edge adjustments to ensure the taxation is actually similar a retail sales tax: imports must endure taxed, together with exports convey to instruct a rebate. In addition, the payroll taxation is non cutting but rather firms instruct a deduction for project payments, but that deduction is much the same every bit a payroll taxation cut.
Personally, I similar the three-point innovation listed above, together with I hence similar the reform proposal beingness discussed inward Congress. H5N1 lot of confusion close things similar edge adjustments powerfulness disappear if commentators realized that what is beingness discussed is largely equivalent to this three-point plan.
Addendum: I don't intend it is quite correct to say, as Paul Krugman does, that this innovation is a shift from taxing profits to taxing consumers. That ignores business office 3 of the three-point plan. It is to a greater extent than accurate to order it is a shift from taxing profits to taxing consumed profits. Moreover, I intend the reform would promote economical increase together with rise living standards. H5N1 large literature suggests that taxing consumption is preferred to taxing income, specially uppercase income. So a shift from a profits taxation to a consumed profits taxation is a pace inward the correct direction. Sumber https://gregmankiw.blogspot.com/
