Kepner Income Tax
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The Kepner Income Tax is an approach to
Predicted effects
Tax burden visibility
Supporters assert that the proposal would make the cost of federal government visible. Under the current tax system, the federal government collects revenue through a wide variety of taxes on individuals and businesses. Thus the cost of government is spread out among many different avenues and may not be fully visible to individual citizens.[3] For example, corporate taxes and compliance costs are passed partially from producers to final consumers when producers include those costs in the retail price of goods and services. Proponents claim that the Kepner income tax would reduce the "K Street tax lobbyist's" ability to influence legislators to manipulate the U.S. tax code for the benefit of their clients. The plan does not prevent future changes by Congress; however, due to the transparency of the tax, the American people would be aware of changes to the tax base from exemptions because a change in tax rate would likely be reflected. Politicians would have to justify to the American people any tax increase or decrease. In addition, the Kepner tax would remove the use of tax exemptions for corporate welfare.
Effect on international business locality
Global corporations consider local tax structures when making planning and capital investment decisions. Lower corporate tax rates and favorable transfer pricing regulations can induce higher corporate investment in a given locality. Such investment translates into higher economic growth. Ireland's real GDP growth was almost three times higher than the European Union average between 1991 and 2000. During the decade, Ireland taxed corporate profits from manufacturing at 10%, the lowest in the EU. The United States currently has the highest combined statutory corporate income tax rate among OECD countries.[4] The Kepner tax would eliminate the corporate income tax, which supporters argue would make the United States a tax haven and boost the economy.
Critique
Critics claim that the Kepner Income Tax system could penalize work and discourage saving and investment. Phil Hinson stated that the Kepner tax would provide many benefits over the current system; however, Hinson argued that the tax rates would need to be higher than the FairTax proposal (often criticized by Kepner), that special interests would manipulate the tax, and that no formal proposal or research exists.[1] The principles of an income tax are also argued by critics. Frank Chodorov wrote "... you come up with the fact that it gives the government a prior lien on all the property produced by its subjects." The government "unashamedly proclaims the doctrine of collectivized wealth. ... That which it does not take is a concession."[5]
See also
Notes
- ^ a b c Hinson, Phil; Kepner, Hayden (2007-07-08). "Phil Hinson Fair Tax Show". Radio Sandy Springs. Archived from the original on 2007-07-16. Retrieved 2007-07-24.
- ^ Kepner, Hayden. "Biography". Arnall Golden Gregory. Archived from the original on 2007-06-07. Retrieved 2007-07-24.
- ^ Hodge, Scott; Atkins, Chris (2005-11-15). "The U.S. Corporate Income Tax System: Once a World Leader, Now A Millstone Around the Neck of American Business". The Tax Foundation. Retrieved 2006-08-03.
- Ludwig von Mises Institute. Retrieved 2007-01-24.