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2004 Tax Watch 1 (2004)

handle is hein.taxfoundation/taxwtch0001 and id is 1 raw text is: FOUNDATION M e s sage f ro m t he Pr e sid e nt .i J o ck T ax es Jd\ Keep Spreading Wacky Taxes; Tax Bills to Watch; as Tax Foundation in the Media Putting a Face on j America's Tax Returnso Making Taxes° Simple Support the Tax Foundation '11 make it clear to the taxpayer who and what is being taxed, and for hoxv much. 3. Stabilty and non-retroactivty: Tax law should not change continually. Good eco- nomic decisions require stable rules of the game, and that hcludes predictable taxes. Taxpayers should be able to rely on the law as it exists when they enter into Mnsactions, and not be penal- ized by subsequent tax changes. 4. Neutrai ty: The purpose of taxes is to raise revenue, not socially engineer the .......economy with subsidies and . . . . . . . . . ......... ....... . ..........Mi::: penalties. Taxes should aim .to minimize economic distor- tion, favor broad tax bases ............................... nd l w rat s, and sh u d . ................................. . . . ::::!: !: !: !: ! not attempt to micromanage Seconomic outcomes. to rot.-pto o.: Taxes should promote economic growvth, and not interfere with Strade or capital flows xvithin Stile U.S. or across borders. axes should consume as smaii a portion of national income as possible to fund legitimate government programs. With. these rules in. mind, let's have a look at the candidates' tax plans. The Bush administration's main tax proposal in their 200 5-2009 budgets is a call for Congress to make thc 2001 and 2003 temporary Bush tax cuts perina- rncnt, rather than expiring betxveen When voters head to the ballot box this November, one factor influencing their decisions will be the tax packages proposed by candidates. That is, if they are able to comprehend them. Presidential tax plans are notoriously complex, with political sound bites and tax jargon obscur- ing their impact. Given their complexity and vagueness, how should the average voter evaluate candidates' plans? One way is to start with a few simple rules of sound taxa- tion,' and then com pare plans iiii{iiiiiii'i,'i.'i,'ii,'i,'i,'i,' to these criteria. W ile this i: ::: :': ::::: alone xwon't telixwhether atax : ::: plan is good or bad, it offers a ::::::::::::::::::::::::::::::::::: .. ............................ .......... . . ................................................. ........... simple, objcctive way to com- : pare plans across candidates. Over the years, economists from Adam Smith to Milton Friedman ha.e oftered their own lists of pr incipies thatL should guide good tax pol.icy. .At the Tax Foundation, our cunumists havc natrrowcd them. duwn1 to five simple rules, wvhich are applicable to a xwide range of tax proposals. They are as folloxws: 1, Simp icity: The tax system should be as simple as possible. Complexity makes tax compliance needlessly expensive and punitixve. Taxes should be easy to undeistand and comply xwith. 2 a Tasparency: A guod ta-x srstcm re- quires infonned taxpayers. Tax plans should 0 AmpR w 0 do AM AM AM 98ft Am w Ar-M mp-Im th t lax Plans Mciking 3.. v u u Prealdell id/

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