Take a look at the Heritage Foundation’s publication, “A Blueprint for Balance.” Full pdf available for download here. It’s a bit of uncommon good sense; you should take the time to at least scan the whole 180-page document. Go ahead and do so; I’ll wait right here.
Finished? OK, let’s look at some of my favorite bits.
This is from the introduction:
Congress should determine whether:
1. Eliminating the program would increase opportunity or reduce favoritism;
2. The program would better serve the American people if it were administered and financed by the private sector;
3. The program would be better administered by state or local governments; or
4. The program is wasteful or duplicative.
Federal taxes exist to raise only those revenues necessary to fund the constitutionally prescribed duties of the federal government. Revenues should be collected in the least economically damaging manner. The U.S. system fails Americans on both fronts: Taxes are too high and their collection is inefficient. The U.S. tax code’s complexity and structure stifles economic freedom, removing vibrancy and prosperity from the economy. Fundamental tax reform would alleviate the harm caused by the tax system and thereby significantly expand the size of the economy. Stronger economic growth would substantially improve the incomes of Americans, and enhance economic opportunities.
Fundamental tax reform would lower individual and business tax rates; establish a consumption tax base, rather than the hybrid income-consumption tax base that the current system uses; eliminate the bias against saving and investment; eliminate tax preferences and simplify the tax system; and make the U.S. tax system more transparent so that taxpayers understand how much they pay to fund the federal government.
Heritage misses one point here; it isn’t just tax policy that disincentivizes saving, although it sure as hell goes a long way towards that. It is also the fact that the Fed has held interest rates so close to zero as makes no difference for years; there is just no reason to let money sit in an account to no purpose. Instead money has flowed into equity markets, producing a huge inflationary effect there – in other words, another bubble.
By all means, do read the entire proposal. It’s an uncommon piece of good sense, it would produce some good, solid, pro-growth policies and would probably usher in (at least) a 1980s-style boom.
That’s probably why nobody in either major political party will ever seriously propose even part of it.