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Is it Time to Eleiminate the Income Tax?

I spent the evening with Dr. Robert Frank, professor at the Cornell University School of Management, and author of The Economic Naturalist’s Field Guide. US consumer spending  peaked at $10 trillion, or 73% of GDP in 2000, and in the new world of falling incomes and enforced savings rates, it will take many years to come back. The current disaster was a guaranteed outcome, because while incomes stagnated over the last 30 years, the median home size jumped 50% to 2,600 square feet. Deregulation poured gasoline on the fire, enabling an unsustainable culture of leverage. California is in a real pickle, because governor Arnold Schwarzenegger is forced to act as Herbert Hoover did by balancing a budget while falling into a Depression. Dr. Frank argues that we should use this economic crisis to fundamentally remake the US tax system. The current system taxes savings on multiple levels, but spending is tax free. We need to scrap the income tax (three cheers), and implement a steeply progressive consumption tax. We need to tax pollution the same way. Dr. Frank, who co-authored a previous book with Fed governor Ben Bernanke, offers radical solutions. It seems that desperate times require desperate measures.