OPINION:
There are many tax proposals out there during this presidential-election season, but some are much more sensible and pro-growth than others.
Any proposal that includes a value-added tax (VAT) or national sales tax has the potential to harm a consumer-driven economy, which ours is. The tax calculation and enforcement would probably be very cumbersome. Sales taxes are by nature regressive. Lobbyists would be clamoring for exemptions and special tax breaks. There would be a great incentive to keep sales off the books.
The worst Republican proposal is Mike Huckabee’s Fair Tax, which would have a very high tax rate at every level. The most sensible tax proposal by far is Ben Carson’s flat income-tax proposal. Income taxes are the fairest taxes because they are based on what you make in a specific year. The proposal is essentially a flat income-tax rate of around 15 percent with no exemptions, no deductions and no tax credits. It would take away the socialization (picking winners and losers) in the tax code.
Hillary Rodham Clinton’s and Sen. Bernie Sanders’ proposals, on the other hand, are extremely destructive. They hinder growth. They pick more winners and losers instead of simplifying the cumbersome and destructive tax system, and they are premised on the belief that you can push tax rates on the highest earners closer to 100 percent (Mr. Sanders has mentioned 90 percent). The amount of lobbying for special tax rates would be rampant and there would be great incentives to hide and divert income to lower tax countries.
When individuals and businesses are allowed to keep more of the money they earn, the economy has a much greater growth potential than it does when the government takes a greater share, runs it through a bureaucracy and then redistributes what is left over. Currently Washington is doing very well while most of the rest of the country is stagnant at best.
JACK HELLNER
Springfield, Ill.
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