EconLog

The Jane Galt Tax Plan, 2002-11-24

'Jane Galt' proposes a tax system that many economists would favor:

1. Eliminate just about every income subsidy and replace it with a negative income tax.
2. Eliminate just about every tax other than the income tax.
3. Eliminate every deduction.

It seems to me that the resulting system would be efficient and progressive. However, I think that we need to provide young people with an incentive to opt out of Social Security. I would concoct some kind of IRA scheme where in exchange for taking a higher retirement age you get some tax-advantaged savings.

UPDATE: I also would raise the tax on gasoline. There is no painless way to reduce our dependence on foreign oil. A higher gas tax--or a tariff on oil imports--would reduce our dependence in the least painful way.

Discussion Question. Which parts of this tax simplification proposal would be most difficult politically?