Replacing the Income Tax: Principles for a New Tax System : A Report of the Csis Domestic Policy Issues Program (Csis Panel Report)

This report of the CSIS Domestic Policy Issues Program presents basic principles and a framework for a new system of federal taxation. It discusses the economic and political rationale for replacing the income tax, explains how the new code would eliminate the current tax code's bias against saving and investment, explores various options regarding the tax base, rate structure, and tax treatment of items such as home mortgage interest and gifts and bequests. The report also addresses key transition issues and provides a brief overview of the major tax replacement proposals under consideration in Congress.

...the simple truth is that the current tax system is seriously flawed and should be replaced. The ad hoc tinkering at the margins of the code that has characterized tax "reform" in recent decades has only exacerbated the problem. What is needed is a new tax system--a tax system that will not penalize entrepreneurial activity, that is efficient, fair, and comprehensible, and that will enable U.S. taxpayers to claim greater control over their individual financial destinies and allow U.S. enterprises to compete effectively in the global marketplace. At its core, comprehensive tax reform should be an effort to construct a new tax code that will increase economic productivity and permit Americans to enjoy higher living standards. -from the Introduction