Read My Lips

I sitting at my desk working, and I'm listening to news about the steps California Republicans are taking to prevent tax increases. Some of this stuff is pretty extreme. Let's summarize:

• If the government has a surplus (Bush's first tax cut), the correct response is to cut taxes.
• If there's a recession (Bush's second tax cut), the correct response is to cut taxes.
• If we're in a severe liquidity crisis (now), the correct response is to cut taxes.

This isn't a policy; this is a religion.

At the same time, there are continuing claims that California places a huge tax burden on its residents and businesses, and that that burden hampers economic growth. Other analyses don't back that up. (The latter article emphasizes an important point: the maximum tax rate on the book isn't the same as the effective tax rate; the latter takes into account credits, deductions, and exemptions.)

My conclusion: the tax code is sufficiently complex that people of average intelligence have very little ability to reason about what it says and what it does. The result is that we spend a lot of time bickering that we could spend on higher-value activities.

Here's my income tax proposal (I'll have to get back to you on sales and property taxes):

• The state of California -- why stop there: the federal government as well -- should have a simple table of two columns and very few rows. The left-hand column has an amount of annual income. The right-hand column has your tax rate.
  
• Every taxable entity -- every single individual, every family, every business -- calculates its tax liability using this same table.
• The dollar amount in the left-hand column is dollars of income per person. If I have a family of four, and a total income of $80,000, I will read the table row for $20,000. If I have a company with 100 employees and total income of $20 million, I will read the table row for $200,000.
• The government can choose to incentivize certain activities (e.g. charitable giving) by giving tax breaks. However, the whole tax code -- the list of incentives as well as the aforementioned table -- must fit on a single letter-sized piece of paper printed with text no smaller than nine points.