DISRUPTING TAXES

Cryan delivers a thorough critique of the United States tax system and proposes an alternative.

The author begins his concise and stimulating study with the familiar observation that the “gargantuan” U.S. tax code is an unwieldy mess, a “nearly impenetrable treatise” totaling upwards of 70,000 pages. In addition to its inscrutability, it is deeply flawed and unjust, per the author, permitting far too many loopholes and encouraging far too many tax-avoidance strategies, resulting in a “complicatedly unfair system that is steeped in political favoritism.” Cryan asserts that the dramatic shift—one that began in the 1980s—to a pronounced emphasis on the taxation of individual income produced the worst inequality the nation has ever seen. The author deftly sketches a brief history of tax policy in the U.S., convincingly arguing that the nation’s founders “never established an optimal tax theory for funding the federal government” and that what is most needed now is a “general mathematical construct.” Cryan articulates one: the Automated Banking Transaction (ABT) Tax, in which every single banking transaction is automatically taxed one percent. The author argues that this would generate sufficient revenue, eliminate loopholes, render obsolete the burden of filing taxes, and do away with all other federal taxes. The goal here, he states, is to create the broadest possible tax base and the lowest possible rates with a minimum of exemptions. This is a fascinating proposal, though it’s far too brief (well under 200 pages) to be fully persuasive—as this is an excruciatingly complex issue. For this reason, it’s a shame the author wastes time arguing somewhat pointlessly that his theory accords with the principles of modern physics—there is a totally gratuitous section on entropy. However, taken for what it is—a condensed and hyper-general statement of an overarching principle—this is a worthwhile contribution to an increasingly urgent discussion.

A provocative study of a subject too important to be neglected.