Thinking About Tax Reform

Almost everyone agrees we need tax reform. The current tax code is a disgrace, and its enforcers are abusive. But there's a solution.

by Rod D. Martin
November 18, 1999

Almost everyone agrees we need tax reform. The current tax code is a disgrace, and its enforcers are abusive.

Yet in creating a new code, just anything won't do. Three principles must guide our design: Workability, Visibility and Fairness. The current system is good at the first of these – it collects taxes effectively enough – but it actively subverts the other two. It is in them we will find relief.

Visibility has been designed out of almost every tax system in the world. The reason is simple: to arbitrarily and unaccountably tax, you must design a code no one can understand. Failure to do this in the 18th century produced the greatest tax revolt ever – the French Revolution – and governments everywhere have taken notice since. If Americans want to know exactly what they owe and why – thus making it difficult for Washington to unaccountably tax and spend – they must design an open, simple code.

Likewise, the current tax system loathes fairness. Designed…