The Fair 55 Tax Reform Plan (Part 4)

Michael Caryl, Fair 55 Tax Reform, West Virginia, Michael Caryl

THE PLAN’S TAX REVENUE NEUTRALITY ILLUSTRATES ITS CAPACITY TO ACHIEVE ULTIMATE FISCAL RESPONSIBILITY

Precisely because the concept of “tax reform” often means little else than either lower tax rates and revenues to some, or higher tax revenues to support even more government spending to others, prudence suggests that any serious and objective effort at comprehensive structural tax reform must present its fundamental concepts in a revenue-neutral setting. Thus, this proposal seeks to avoid the distorting influence of the bigger government vs. smaller government philosophical debate. Indeed, it is only once a fair and efficient tax structure is in place that the deck is cleared for a principled discussion about both the proper general level, and the legitimate objects, of government spending. Thus, the final disposition of those issues can then best be implemented through such a reformed tax structure.

For these reasons, this proposal will be illustrated by a revenue neutral model which is designed to disarm at the onset the other skeptical threshold question typically confronting tax reformers, to-wit: “how are you going to pay for that?” See, the Fiscal Scorecard Illustration (the “Fiscal Scorecard”) at page 5, supra. By use of specific rates to be applied to a restructured base, the revenue-neutral illustration of the capacity, of the restructured general fund tax base, merely demonstrates that it is consistent with what is, at least, the current political determination of the proper level of spending. That is necessary because, to answer the above-quoted question, by calling for a reduction (or increase) in the current level of government spending is to introduce that fundamentally separate and super-heated issue as a disabling distraction to the objective re-design of the substantive tax structure. Thus, by using a revenue-neutral illustration, the analytical focus can rest solely on the substantive terms of the restructured base needed to validate the legitimacy of its policy rationales.

That, the foregoing Fiscal Scorecard of the Fair 55 Tax Reform Plan© even includes a “rainy day fund” cushion, answers the foregoing question about the adequacy of its revenue-generating capacity. Therefore, until the necessary modeling and other testing described in Section J. infra is completed, the rates illustrated in the plan are simply adopted to enable the process, of designing the restructured substantive tax base, to proceed, through the first critical step in the overall reform process, unencumbered by the ultimately related but initially separate question about the proper level of government spending.


Contact Michael Caryl for further questions or assistance.

The Fair 55 Tax Reform Plan (Part 1)

The Fair 55 Tax Reform Plan (Part 2)

The Fair 55 Tax Reform Plan (Part 3)

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