The Tax Reform We Need Now

A conservative vision for a new tax system based on workability, visibility, and fairness.

by Rod D. Martin
October 3, 1997

The recent hearings on abuses by the IRS have shown all too clearly the dangers of handing anyone arbitrary power. The key word here, moreover, is "arbitrary." As Nobel Prize-winning economist F. A. Hayek showed more than fifty years ago in his classic "The Road to Serfdom," a arbitrary bureaucracy can destroy liberty just as surely as the worst tyrant. No one who watched the hearings will deny this.

It need not be this way. But just any ole tax reform won't do. We must design a new tax code that rigorously conforms to three guiding principles: Workability, Visibility and Fairness.

The chief guiding principle of tax systems historically has been workability: will the system collect all the taxes owed? But if this is our only aim, why not hire the mafia to collect taxes (some might say we already have)? This principle by itself is not enough.

The second principle, visibility, has been consciously designed out of every major tax system in the world. The reaso…