Lecture 5: Toward an Optimal Tax System, Part 2: What Might Full-Blown Tax Reform Look Like, and What Can We Hope to Accomplish by Improving the Tax System?
What benefits might we expect from a complete tax overhaul? The Tax Cuts and Jobs Act amended the income tax, but was not a full-blown reform of the tax system.
Several features of the new tax system (as with the old system) remain less than optimal. There is a tax base that is still overly complex and inconsistent with basic tax principles for efficiency and growth.
Several alternative tax regimes will be presented, including a rationalized income tax and systems based on consumed-income or cash flow.