Tax Reform

Let's Grow the 47%

Reihan Salam is proposing to do exactly that, and you might find yourself nodding in agreement.

The deeper problem isn’t that too few people are paying federal income taxes, as DeMint and Representative Michelle Bachmann and now Mitt Romney maintain. Rather, it is that most of the taxes we do pay, with the big exception of retail sales taxes, are quite stealthy. In the days before income tax withholding, taxpayers had to write checks to the federal government. Now, many taxpayers have a better sense of the size of their income tax refund than of what they’ve actually forked over to the federal government.

It turns out that the best way to address Romney’s underlying concern – that a large and growing number of Americans have lost sight of the real cost of government – might be to remove even more households from the income tax rolls and create a very visible new tax to make up the difference. That is why Republicans, Mitt Romney included, should give serious consideration to Michael Graetz’s Competitive Tax Plan (CTP).