The main problem is that the current tax code is incapable of raising the revenue needed to pay for the goods and services of government...."Pay a fair share." Hmm, where have I heard that before?
A logical way to help raise the additional needed revenue would be to tax capital gains at the same rates as ordinary income. Capital gains on assets held for more than a year before selling are taxed at about the lowest rate in the code, currently 15 percent and expected to rise to 20 percent in 2013. That is an indefensible giveaway to the richest Americans. Research shows that the tax breaks do not add to economic growth but do contribute to inequality. Currently, the top 1 percent of taxpayers receive more than 70 percent of all capital gains, while the bottom 80 percent receive only 6 percent.
Another sensible approach is to cap deductions at 28 percent, or to convert deductions, which disproportionately benefit high-bracket taxpayers, to tax credits, which would provide the same benefit to all taxpayers, regardless of tax bracket. President Obama must also pursue other revenue raisers, including a restoration of the estate tax, higher tax rates or surcharges on multimillion-dollar incomes, and higher corporate taxes, including an end to the deferral of tax for American companies that stash their earnings abroad....
With that in mind, Mr. Obama would be wise to instruct the Treasury Department to start work on tax reform now, exploring carbon taxes, both to raise revenue and to protect the environment; a value-added tax, coupled with provisions to protect lower-income taxpayers from higher prices, to tax consumption and encourage saving; and a financial transactions tax, to ensure that the financial sector, whose profits have substantially outpaced those of nonfinancial corporations, pay a fair share.
The left's solution is always more government, which requires ever increasing demands for revenue. It's never about how we can reform systems to look forward, tapping the vitality of the individual and the dynamism of markets.
And check this great Fox News segment from over the weekend, "Lawmakers Pushing a Mileage Tax For Drivers In 2013."