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01/29/2012

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RA

The ideal tax system would be simple, raise adequate revenue, and be sufficiently innocuous as to not cause a significant level of evasion.

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According to the same CBO study, federal taxes on the middle classes comprise on average only about 15% of their incomes, This disparity in tax rates indicates that the American tax system is already quite progressive when corporate income taxes are combined with personal income and capital gains taxes.

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Wealth taxes have several other serious problems in addition to their negative effects on savings. It is almost impossible to value accurately many sources of tangible wealth, such as the value of privately owned businesses, so that an actual wealth tax would be rather narrow.

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Regarding Mayor Brown's papoosrl for going green, I would be interested in knowing what kind of vehicle he drives. Somehow I don't see him driving a Prius, but I could be wrong.

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Another major problem with even a small tax rate on wealth is that it implies a very high tax rate on savings. Consider a constant 2 percent tax on wealth, and suppose that a household saves $10,000 out of its income to raise its future wealth.

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