TAXED OUT

A bold assessment of the toll that the income tax has exacted on the American economy, coupled with a plan to replace it.

A father and son, in their debut, proffer a brief but densely packed analysis of the income tax. Unlike many treatments of income tax opposition, they don’t dwell on its constitutionality—an argument whose ship has sailed. Instead, they marshal empirical evidence against the tax, arguing that its replacement by a national sales tax would benefit all American citizens. Helpfully, the book begins with a synoptic account of the history of the income tax, which didn’t exist prior to the Civil War and was passed following World War II. It was initially designed to remain a modest measure, the authors write; however, it ballooned into the primary source of the government’s revenue, and the authors assert that it gradually strangled the prospects of fair competition in an increasingly global economic theater. Now, according to the authors, it ranks as an “economic natural disaster.” They devote much of their discussion to dispelling what they consider to be commonly held misconceptions about the income tax. For example, they argue that the tax is actually regressive, not progressive, and that the brunt of it is ultimately paid by consumers who absorb the cost through inflated prices and deflated salaries. Also, they say, the tax is effectively a self-imposed tariff that disadvantages American businesses competing with foreign rivals: “The income tax raises the cost of domestically produced goods sold in the U.S., but it does not apply an equal tax to foreign-produced goods sold in the U.S.” Although they narrowly confine the scope of their investigation to the income tax, their analysis always involves the U.S. economy as a whole, as they contend that the tax is “the major impediment to America’s economic prosperity.” They also judiciously consider the tax’s political context and realistically acknowledge the many obstacles facing the tax’s elimination.

A lucid, thorough reflection on the income tax that manages to be both rigorous and accessible.