HERE’S AN EVEN WORSE IDEA FOR FIXING THE TAX SYSTEM – GIVE CONTROL OF IT TO THE UNELECTED BOARD OF GOVERNORS OF THE FEDERAL RESERVE
Well, the suggestion isn’t to give the Fed control of making all the federal tax laws. The suggestion is to just let them set the tax rates. That way the rates can be set high enough to pay for everything Congress wants to spend money on, instead of having the federal government constantly running at a deficit.
What a brilliant idea! Why didn’t someone suggest this sooner? Congress can just order all the programs it wants, then leave it to the un-elected board of the Fed to jack up the tax rates to pay for it all. What could go wrong?
Actually, now that I’m thinking about it, this might not be such a bad idea, although not for the reasons that the authors of it are suggesting. It’s possible that if the Fed were to set tax rates high enough to actually reduce the federal budget deficit, the resulting tax increases would cause a taxpayer uproar big enough to upend the whole system and finally bring federal spending under control.
But nah, that would never happen, as the authors of this proposal implicitly concede when they say rates should be set high enough to “manage federal debt sustainably over time,” but should also be adjusted to “promote full employment and stable inflation… while rates could go down a bit when the economy needs an extra spark.” So the Fed wouldn’t have to actually raise tax rates enough to balance the budget, but they would get to try to manage the economy by tinkering with the rates in response to economic conditions. Again, what could go wrong?
It’s only been a few days since I posted about someone promoting the idea of having the government prepare everyone’s tax returns. That would supposedly improve the functioning of our dysfunctional federal tax system. Now here’s another idea that’s supposed to fix a separate, but related way in which our federal tax system is broken. Notice that both ideas would make the current system even more self-perpetuating. That’s not the direction that things need to go, is it?
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