Should we have an independent tax authority like the Federal Reserve?

Status
Not open for further replies.

Narmer

Diamond Member
Aug 27, 2006
5,292
0
0
This is an old article but I was thinking about studying this issue for graduate school so I asked Prof. Blinder to send it to me. I eventually found it online and decided to post what I could here but I have the full pdf for those that want to read it. I also added the jstor link for those that have access.

Imagine if we could have a more efficient tax system setup to optimize the tax rate and collection based on simple mandates. For those who do not have access, the Prof. argues about setting up an independent tax authority like the Federal Reserve where technocrats can write the tax code. This would be better than having politicians do it since they think only in the short term and can be swayed by interest groups. I think this would be a revolutionary idea, like when New Zealand started inflation targeting in the early 1980s. What do you'll think?

http://www.foreignaffairs.com/articles/53584/alan-s-blinder/is-government-too-political

http://www.jstor.org/stable/20048280?origin=JSTOR-pdf

Is Government Too Political?

Alan S. Blinder
Alan S. Blinder is Gordon S. Rentschler Memorial Professor of Economics at Princeton University and Director of Princeton's Center for Economic Policy Studies. In 1993-94 he served first on the Council of Economic Advisers, and in 1994-96 as Vice Chairman of the Board of Governors of the Federal Reserve system. A QUESTION OF BALANCE
Since the 1994 congressional elections, America's central political debate has pitted "big government" against "small government." This is a sterile dichotomy that captures the concerns of few citizens. Americans abhor paying taxes and are constitutionally incapable of favoring "big government" in the abstract. Nevertheless, I suspect that voters want more government, not less, in certain key areas -- crime prevention, environmental preservation, job security, and education, to name just a few. Naturally, they want less government elsewhere.
The real source of the current estrangement between Americans and their politicians is, I believe, the feeling that the process of governing has become too political. Americans increasingly believe that their elected officials are playing games rather than solving problems. Political debate has too much "spin" and too little straight talk. The system is too argumentative and tied up in partisan and procedural knots. Most important, government appears excessively beholden to those with political clout, often at the expense of the public interest.
In return for these perceived vices, citizens exact retribution from professional politicians: witness the romanticized yearning for a man on a white horse (first Ross Perot, then Colin Powell), the meteoric rise and fall of the anti-politician Steve Forbes, and the growing pressure for term limits. Each of these rejectionist phenomena is a Bronx cheer for career politicians.
So what is the solution? Policy without politics? Of course not. But "politicalness" is not something that must be turned on or off like a light switch; it can come in shades, more like a rheostat. We could be having a different debate. It would not be about the scale of government, but about the scope of politics; not about whether government is too "big" or too "small" in some abstract sense, but about what things the government should and should not be doing. And it would be about how political the government's various decisions should be.
Although important, this last question is rarely mentioned. My contention is that one root cause of Americans' current distaste for government is that our system is too political. Short-term electoral considerations and political gamesmanship have fueled much voter resentment. Fortunately, we can do something about it.
 

Anarchist420

Diamond Member
Feb 13, 2010
8,645
0
76
www.facebook.com
I don't really think it would make things better overall, or worse overall. There really shouldn't be any national tax. We could do fine without it. You could reduce the size of government so you wouldn't need compulsory taxation at the national level and the states could donate.
 

Anarchist420

Diamond Member
Feb 13, 2010
8,645
0
76
www.facebook.com
They'd need to be able to be audited by the people directly though if we did do something like that. In other words, if an independent tax agency was created, the people should be able to audit them however the people feel like. It wouldn't be a bad idea then.
 

Fern

Elite Member
Sep 30, 2003
26,907
173
106
Should we have an independent tax authority like the Federal Reserve?

I think it would be rules unconstitutional.

The Constitution gives the power to raise money etc soley to Congress. To give some other institution the authority to write tax rules etc seems to me a violation of that.

Fern
 

MovingTarget

Diamond Member
Jun 22, 2003
8,999
109
106
I think it would be rules unconstitutional.

The Constitution gives the power to raise money etc soley to Congress. To give some other institution the authority to write tax rules etc seems to me a violation of that.

Fern
Yeah, that is a big problem. If tax power were to be given to an "independent" entity like the Federal Reserve, then we would have a situation of "taxation without representation". We Americans don't take too kindly to those kinds of situations.
 
Status
Not open for further replies.