Many tax policy experts spin a simple fairy tale when they talk about how to reform the tax system. They say that we just need to cut tax rates, which will expand the economy, which in turn will reduce the deficit. But unfortunately, in the real world, we face real budget constraints and a real scarcity of resources.
The secret to cutting rates and increasing revenues? President Reagan knew it, as do President Obama's fiscal commission co-chairs, Democrat Erskine Bowles and Republican Alan Simpson.
Some economists propose lowering payroll taxes and then raising marginal rate taxes. Here's another perspective.
A previous rate hike in the capital gains tax led to a decline in revenue collected.
Extreme tax avoidance could frustrate Obama's plans to trim the deficit.
The 'starve the beast' strategy – raising spending but not taxes – hasn't cut the deficit.
All Americans should encourage President Obama to break his campaign promise to extend the Bush tax cuts.