Lexington Books
Pages: 174
•
Trim: 6½ x 9
978-1-4985-8717-4 • Hardback • March 2019 • $111.00 • (£85.00)
978-1-4985-8719-8 • Paperback • July 2021 • $44.99 • (£35.00)
978-1-4985-8718-1 • eBook • March 2019 • $42.50 • (£35.00)
M. Kevin McGee is professor emeritus of economics at the University of Wisconsin, Oshkosh.
1 The Problem
2 The Impossibility of a Coherent Traditional Income Tax
3 The Logic of Consumption-timed Taxes
4 The VAT, Flat, and all That
5 Savings & Borrowing Under a Consumed-Income Tax
6 The Tax Treatment of Owner Occupied Housing
7 Transition Issues
8 The Tax Treatment of Small Businesses
9 Inheritances, Bequests, and the Estate Tax
10 Insurance
11 The Corporate Income Tax
12 Tax Expenditures
13 The Trump Tax Cut
14 Summary: The Needed Tax Changes
15 Is Reform Attainable?
16 Conclusion
Kevin McGee’s book is a lucid guide to a big idea in the debate over fundamental tax reform, one that is aimed at achieving the hitherto elusive goal of a tax code that is fairer, simpler, and more efficient.
— Jason Furman, former chair of the Council of Economic Advisers and Professor, Harvard University
The recent tax bill did not constitute a full-blown reform of what and how we tax. Thankfully, Kevin McGee reminds us of what a real pro-growth reform might be. The individual and corporate Income taxes fall more heavily on income used for saving and investment than on income used for consumption; they retard capital formation and wage growth, and they cost the country about a tenth of its potential annual output and income each year. McGee resurrects the concept of a progressive tax on income used for consumption – a “consumed-income tax” – that avoids these biases. It would allow more deferral of saving and full deductions for the cost of capital outlays. He has carefully explained how it would be applied to all manner of income and assets. Importantly, he addresses the transition to the new tax system, knocking down long-standing objections that it is too hard to get from here to there. This is a must read for young people new to the tax debates, and a good refresher for those who cut their teeth on the Flat Tax, the X Tax, and the national retail sales tax ideas of the post-Kennedy tax cuts era.
— Stephen Entin, Senior Fellow Emeritus, Tax Foundation
Taking off from the inconsistencies, imperfections, and idiocies inherent in the current tax system, Dr. McGee lays out the most thorough—and certainly best explained—case for a consumed income tax that I have seen. Along the way, he tackles the many difficult issues in such a reform, including debt, depreciation, old and new wealth, inheritance, timing, progressivity, and difficult transition issues. A true tour de force.
— Eugene Steuerle, Richard Fisher Chair, the Urban Institute, Cofounder, Urban-Brookings Tax Policy Center