THE last time Republicans controlled both the White House and Congress,under President George W. Bush, they passed a package of temporary tax cuts. This time they are displaying more ambition. The tax bill unveiled in the House of Representatives on November 2nd can properly be called a reform. It would slash deductions that distort the economy: for debt and mortgage interest, or state taxes and manufacturers. The savings would disappear towards reducing most marginal tax rates.
The principle of scrapping deductions in order to lower rates is precisely the right one. But the House bill is flawed. Despite leaving the top rate of personal income tax unchanged,the bill’s...
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Source: economist.com