US Tax Reform
Book Review: The benefit and the Burden
Bruce Bartlett’s book The Benefit and The Burden is essentially a book that talks about the existing tax code in the United States and the reason(s) it is need of a reform. The author starts the book by briefly discussing the history of Federal Income Taxation in the United States starting from the post-American Revolution period at which time there was nothing called the income tax. In fact, income tax didn’t get introduced in the United States until 1861. The only form of taxation before that were tariffs on trade. The author then moves on to explain how the Sixteenth Amendment came into being before discussing the Kennedy tax cut and finally the Reagan tax cut in 1986 which was the last time US policy-makers reformed the tax system. Since then, the system has gone through numerous changes which have gradually taken toll and has ultimately left the system incapable of governing itself. The fundamental reason for having a tax system is to be able to raise revenue required to pay for government expenditures. But the important question here is that where should we bring in this revenue from. Or in other words, who/what should we tax in order to bring in this revenue: should we tax the rich more than the poor or should we tax them equally; should we tax income or consumption or should we tax them both; should we have a broader tax base or a deeper one. Several solutions has been proposed by policy-makers to answer these question which included proposals of tax cuts as well as tax breaks; implementation of consumption taxes such as VAT like many European countries or the implementation of new ways of taxation such as a flat tax rate. In this book, the author put forth these kinds of policy question that our tax system faces and then proposes solutions to some these questions and executes his proposals with the help of facts, statistics, reasoning and empirical evidence.
While exploring various short-comings that the United
Bruce Bartlett’s book The Benefit and The Burden is essentially a book that talks about the existing tax code in the United States and the reason(s) it is need of a reform. The author starts the book by briefly discussing the history of Federal Income Taxation in the United States starting from the post-American Revolution period at which time there was nothing called the income tax. In fact, income tax didn’t get introduced in the United States until 1861. The only form of taxation before that were tariffs on trade. The author then moves on to explain how the Sixteenth Amendment came into being before discussing the Kennedy tax cut and finally the Reagan tax cut in 1986 which was the last time US policy-makers reformed the tax system. Since then, the system has gone through numerous changes which have gradually taken toll and has ultimately left the system incapable of governing itself. The fundamental reason for having a tax system is to be able to raise revenue required to pay for government expenditures. But the important question here is that where should we bring in this revenue from. Or in other words, who/what should we tax in order to bring in this revenue: should we tax the rich more than the poor or should we tax them equally; should we tax income or consumption or should we tax them both; should we have a broader tax base or a deeper one. Several solutions has been proposed by policy-makers to answer these question which included proposals of tax cuts as well as tax breaks; implementation of consumption taxes such as VAT like many European countries or the implementation of new ways of taxation such as a flat tax rate. In this book, the author put forth these kinds of policy question that our tax system faces and then proposes solutions to some these questions and executes his proposals with the help of facts, statistics, reasoning and empirical evidence.
While exploring various short-comings that the United