25Fundamental Tax Reform and Consumption Tax（课件）- 《财政与金融》同步教学（人民大学·第五版）

25 25.1 Why Fundamental Tax Reform? 25.2 The Politics and Economics of Tax Reform 25.3 Consumption Taxation 25.4 The Flat Tax 25.5 Conclusion Fundamental Tax Reform and Consumption Tax 1 of 45 1 25 Introduction In 2011, Republican Presidential candidate hopeful Herman Cain proposed the “9-9-9” plan for fundamental tax reform. Replaces all current taxes with a 9% corporate tax, 9% personal income tax, 9% payroll tax. Eliminates all tax deductions. Example of a “flat tax.” Eliminates any double taxation of a tax base. of 45 C H A P T E R 2 5 ■ F U N D A M E N T A L T A X R E F O R M A N D C O N S U M P T I O N T A X A T I O N 2 25 Introduction While popular with the public, however, Cain’s plan was met with opposition on both the right and left of the political spectrum. Conservatives worried that granting the federal government the right to levy a broad sales tax, which currently is only found at state and local levels, would enable future presidential administrations to enact crippling tax policy. Liberals objected to the inequitable redistribution of the tax burden that would result from this proposal. Lower-income individuals consume a much higher share of their income than do richer individuals, and the current progressive tax structure would be replaced with flat tax rates on all. of 45 C H A P T E R 2 5 ■ F U N D A M E N T A L T A X R E F O R M A N D C O N S U M P T I O N T A X A T I O N 3 25 Introduction Although Herman Cain suspended his campaign on December 3rd, 2011, the support for his tax policy illustrated the people’s dissatisfaction with the fundamental structure of the U.S. income tax. There is no shortage of criticism of the existing income tax: Many claim the tax system is unfair to the poor or to the rich; it is unfair to single people or to married couples; it is too easy to evade, or that the government spends too much time harassing honest taxpayers; that it doesn’t do enough to promote savings or that it provides too