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My preferred solution is a constitutional amendment that imposes a flat tariff of 0-10% on all imports, the exact tax decided by an act of Congress. Congress h

My preferred solution is a constitutional amendment that imposes a flat tariff of 0-10% on all imports, the exact tax decided by an act of Congress. Congress has the power to impose import tariffs already, but a successful movement to use that power would result in the usual bad outcomes: industry-specific protectionism, capture by lobbyists, de facto election of legislators by foreign lobbyists, etc. A better solution might be a Constitutionally-flat national VAT on all goods regardless of origin, using the opportunity to burn the income tax code to the ground. (Firing all the income tax workers would massively decrease the cost of labor all by itself, giving a substantial boost to manufacturing productivity.) This has no chance of being approved.

rdl 16y ago
While the VAT is the least distorting tax, I really dislike the extensive documentation required throughout the economy to implement it. I would prefer a tax on the easiest to audit things -- real estate, maybe a poll tax, and heavy taxation or fees for the use of public property for private purposes (oil and minerals leases, aquifers, ...)
stretchwithme 16y ago
We do need a simple tax code. The current mess is unsustainable, distortive (yeah, its not really a word) and costly. But taxing imports won't fix our trade imbalance. Especially if other countries reciprocate. We are borrowing too much and consuming too much. The world MUST send us more things than we send them. The US government has to stop spending more than it takes in and it has to stop holding interest rates so low. Only then will consumption and production begin returning to normal. That realignment means massive, painful, but necessary change in the economy. But the sooner we choose to begin, the less painful it will be and the more we will be in charge of our own fate.

rdl 16y ago

While the VAT is the least distorting tax, I really dislike the extensive documentation required throughout the economy to implement it. I would prefer a tax on the easiest to audit things -- real estate, maybe a poll tax, and heavy taxation or fees for the use of public property for private purposes (oil and minerals leases, aquifers, ...)

stretchwithme 16y ago

We do need a simple tax code. The current mess is unsustainable, distortive (yeah, its not really a word) and costly. But taxing imports won't fix our trade imbalance. Especially if other countries reciprocate. We are borrowing too much and consuming too much. The world MUST send us more things than we send them. The US government has to stop spending more than it takes in and it has to stop holding interest rates so low. Only then will consumption and production begin returning to normal. That realignment means massive, painful, but necessary change in the economy. But the sooner we choose to begin, the less painful it will be and the more we will be in charge of our own fate.