Is FATCA the Worst Part of the Internal Revenue Code?

Other lawmakers also now understand that the statist campaign against tax competition is bad news for America. Marco Rubio, for instance, deserves credit for trying to stop the Obama Administration from coercing American banks into obeying foreign tax law.

Policy makers should repeal FATCA, of course, but the real problem is that the tax code is biased against capital formation and also has a punitive policy of worldwide taxation.

That’s why the long-run answer is tax reform. All pro-growth tax reform plans, such as the flat tax and national sales tax, get rid of double taxation and they’re also based on the common-sense principle of territorial taxation. With such systems, the government doesn’t need to know about your personal financial affairs, regardless of whether you have accounts in Geneva, Illinois, or Geneva, Switzerland.

International Liberty

I’ve argued that subsidies for the Paris-based Organization for Economic Cooperation and Development are the most destructively wasteful outlays in the federal budget. At least on a per-dollar-spent basis.

But what if we did the same exercise on the tax side of the fiscal ledger. What’s the most damaging provision of the tax code?

In a TV interview earlier this year, I said I was most upset by all the corruption in Washington that is made possible by a Byzantine tax code. But that’s an overall observation, not a specific feature.

Today’s question deals with the part of the tax system is most harmful to the economy, on a per-dollar-collected basis.

If you asked me to make that choice five years ago, I probably would have picked the death tax, though I’ve had some experts tell me that “depreciation” is even worse.

But I think today…

View original post 1,160 more words

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