A Fine Mess: A Global Quest for a Simpler, Fairer, and More Efficient Tax System

Three decades after the passage of the 1986 reforms, the U.S. tax code is a mockery of the BBLR principle. It is stuffed to the roof with loopholes that narrow the tax base and thus force tax rates higher. If we are to fix our complicated and inequitable tax code again, Americans will have to agree—as we did three decades ago—to purge many of those

Franklin Delano Roosevelt, no friend of those in the upper brackets, observed in 1935 that “tax avoidance means that you hire a $25,000-fee lawyer, and he changes the word ‘evasion’ into the word ‘avoidance.’”

Corporate tax revenues are plummeting partly because Congress has larded the corporate income tax with costly preferences and giveaways for corporations, and partly because American multinationals have become so successful at shifting income overseas. Hundreds of millions of dollars—money that might have gone to raising wages, or creating new medic

“We Mexicans are among the most avid consumers of soft drinks,” notes the novelist David Toscana. “We swig a half-liter per person every day—thanks in part to the multinational beverage companies’ distribution, advertising, and pricing strategies, but also because soft drinks, while not exactly nutritious, are at least (usually) free of germs. In M

“The irony is that the VAT is probably the ideal tax from a conservative point of view,” wrote the Republican tax expert Bruce Bartlett, who oversaw tax policy in the Treasury Department under the first president Bush. “As a broad-based tax on consumption it creates less economic distortion per dollar of revenue than any other tax—certainly much le

The Panama Papers indicated that the law firm created some 214,000 shell corporations—legal entities that had no employees, no officers, and no corporate activity except to serve as a clandestine repository for the money of wealthy tax dodgers. Sometimes, the firm put the money into “charities” or “foundations,” which can also be used to hide funds

High tax rates prompt people to spend money on the tax lawyers and finance wizards who design those skillful evasions. For the lawyers and the finance guys, this is a boon. But for the overall economy, it’s a significant loss. The money these taxpayers spent on legal fees and complicated financial constructions could have been invested in ways that

An American couple bringing in the median family income—about $55,000 per year—and taking the standard deduction will pay about 15% of their annual earnings in personal income tax, another 6.5% in Social Security tax, another 2.9% for the Medicaid tax, and roughly 5% in state income tax. In addition, an average American family will pay 5% to 10% of

Countless other countries like ours—advanced, high-tech, free-market democracies—have found ways to collect the tax revenues they need without imposing long hours of tedious labor and large tax-preparer fees on their citizens. Their parliaments and their tax collectors are no smarter than their counterparts in the United States. The difference is,