乔纳森·格鲁伯-财政学（第五版）gruber_5e_lecture_slides_ch25.pptxVIP

Copyright ? 2010 Worth Publishers 25Heather Luea and Dan SacksP R E P A R E D B Y25.1 Why Fundamental Tax Reform?25.2 The Politics and Economics of Tax Reform25.3 Consumption Taxation25.4 The Flat Tax25.5 ConclusionFundamental Tax Reform and Consumption Tax 25IntroductionIn 2011, Republican Presidential candidate hopeful Herman Cain proposed the “9-9-9” plan for fundamental tax reform.Replaces all current taxes with a 9% corporate tax, 9% personal income tax, 9% payroll tax.Eliminates all tax deductions.Example of a “flat tax.” Eliminates any double taxation of a tax base. 25IntroductionWhile popular with the public, however, Cain’s plan was met with opposition on both the right and left of the political spectrum. Conservatives worried that granting the federal government the right to levy a broad sales tax, which currently is only found at state and local levels, would enable future presidential administrations to enact crippling tax policy. Liberals objected to the inequitable redistribution of the tax burden that would result from this proposal. Lower-income individuals consume a much higher share of their income than do richer individuals, and the current progressive tax structure would be replaced with flat tax rates on all. 25IntroductionAlthough Herman Cain suspended his campaign on December 3rd, 2011, the support for his tax policy illustrated the people’s dissatisfaction with the fundamental structure of the U.S. income tax. There is no shortage of criticism of the existing income tax: Many claim the tax system is unfair to the poor or to the rich; it is unfair to single people or to married couples; it is too easy to evade, or that the government spends too much time harassing honest taxpayers; that it doesn’t do enough to promote savings or that it provides too many loopholes for savings; and so on. As a result, fundamental reform of the income tax has become a centerpiece of public debate in recent decades. 25.1Why Fundamental Tax Reform?Improve tax c