Tax Amnesty: The Missing Link
MARTING. LAFFER AND ARTHUR B. LAFFER
"God told me not to file tax returns." "By the time I was required to file, I didn't have the money." "I have not received a payroll check since my first job out of high school." "I was too busy to file and the next time I thought about it, it was too late." "I have not owned a car, real estate, or even registered to vote for the past 10 years." These are but a few of the statements heard by tax practitioners from those who have not filed income tax returns. Many citizens fail to file a single return, often for reasons we are unable to comprehend. The singular act of omission becomes a pattern because of the fear that the one or more omitted tax returns can lead to a prison sentence.
This chapter, by virtue of its existence, exposes a deviant streak in what heretofore had been the unblemished record of a devout supply-sider. This paper is a plea to politicians of all persuasions to raise taxes and raise them now. It is a confession, so to speak, not based on the tax rate/tax revenue dichotomy so appropriately employed over the past decade. It is also not based on sleight-of- hand techniques, by raising taxes on the so-called "sins" or other activities perceived to be harmful to the body politic. Such taxes, whether levied on drug dealers, polluters, or perhaps even lawyers, could well generate revenues all the while making everyone better off.
The tax increase advocated in this paper is a genuine tax increase that could raise anywhere from $40 to $60 billion in its initial years and lesser amounts on an ongoing basis. The rather astounding features of this immodest proposal are twofold: