Monday, December 17, 2012

How To Raise Tax Revenue From The Right Places

Larry Summers does a good job of locating some of our most costly tax policies, that are only available to the super rich.  Messing around with the marginal tax rate on earned income, and deductions from earned income, will not raise as much income as eliminating provisions in the tax code have been written into law primarily for the benefit those who are legally permitted to avoid taxes on capital gains and estate taxes. Closing those loopholes will increase tax revenues while also increasing social welfare.

 Democracy only works well when the general public is well informed.  We do a very poor job of educating the public about the two most important things that government does.  Governments raise money from taxes and they spend that money.  We don't educate the public about tax policy, and most Americans are misinformed about what the government does with the money it collects in taxes.  That is probably not by accident. 

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