True reform will move us toward a flatter tax code. “Under a flatter tax system, those who pay more income still pay more taxes, but that difference will be more proportional to income,” Dubay writes. “A code more in line with the flat tax is necessary to remove the barriers that block entrepreneurship and innovation.”
Americans usually oppose attacks on the financially successful because they hope to be financially successful themselves someday. And the statistics show they may well be. “Soak the rich” policies often just end up hurting the poor. After all, only people with money can invest and create jobs and opportunities.
“Entrepreneurs must be allowed to retain the wealth they create,” writes George Gilder, author of Wealth and Poverty, “because only they, collectively, can possibly know how to invest it productively among the millions of existing businesses and the innumerable visions of new enterprise in the world economy.” Money flows to those who can use it best and create the most value.
If lawmakers are smart, they’ll keep this in mind as they move through the budget process. They have a “great opportunity,” all right, for real budget cuts and genuine tax reform. Let’s hope they take advantage of it.