My Tax System
By Arnold Kling
Jason Furman chides me for not describing my ideal tax system.
let me offer the Bleeding-Heart Libertarian approach to income redistribution. Conceptually, it would involve abolishing public education, all forms of free or subsidized health care, and Social Security. It would abolish all forms of taxation other than a tax on personal consumption. All consumer spending, including spending on education and health care, would be subject to tax. To assist the poor, there would be a negative consumption tax, somewhat like the negative income tax that was originally proposed by Milton Friedman.
The entire Bleeding-Heart Libertarian Welfare State can be summarized by the equation:
T = .4C* – $7000
where T is the total taxes that an individual would pay and C* is the person’s consumption expenditures including spending on education and health. $7000 is a constant term that creates a personal exemption of $5000.
I dodge all the tricky questions of implementation. I admit that Jason lives much more in the real policy world than I do.