Sensible Tax Reform

Christopher M. Korth is Professor of Finance and International Business at Western Michigan University. Prior to joining the faculty at WMU, he served on the faculty at Pennsylvania State University, University of Michigan, and University of South Carolina. He also worked for four years as the Chief International Economist at 1st National Bank of Chicago. He received his PhD from Indiana University.Professor Korth has written several books, including International Business: Environment and Management (Prentice-Hall, Inc.) and International Countertrade (Greenwood Press). In addition, he is the author of many articles in both academic and professional management journals. He has also consulted with multinational corporations, major universities, and national governments.

“In Sensible Tax Reform, Dr. Christopher Korth has done more than take Occam’s Razor to the behemoth we call the United States tax code. He has completely re-engineered it to more efficiently and effectively do the job it was designed to do -– support the legitimate work of government in a fair, efficient, and effective way. Our current federal tax system requiring 77000 pages of documentation seems indefensible to me. So often when taxes are covered in the news media, we know in our guts we are being cheated. But the complexity of the system prevents us from knowing how. Dr. Korth has created a much simpler, and most exciting, much more transparent tax process that can be understood by everyone. The idea of transparency alone is enough to make lobbyists and tax attorneys quiver in their custom-made boots.Dr. Korth moves much of the burden of taxation from production to consumption, providing a broad tax base with few exemptions. Implementing his vision in the face of powerful interest groups that greatly benefit from the complexity and inequality of our current tax system will be an enormously challenging task. It seems quixotic in its scope and ambition. Sancho, would you be good enough to fetch my sword?”- Thomas Rienzo, PhDBusiness Information SystemsWestern Michigan University“This book lays out a tax program that is well thought out, timely and holds the promise for a major transformation in how the American economy functions.  In my work with companies across the economic spectrum, I see the misaligned incentives of the current system – creating suboptimal decisions in compensation, health care and retirement programs. That misalignment also encourages business decisions favoring debt rather than equity investments and, often, foreign investment rather than investments in the US - even when non-tax factors favor the US.  Tax issues should not drive multi-billion dollar business decisions about where to invest and grow.  This book suggests reforms that would eliminate misalignments and benefit the US economy and the US workforce.The approach suggested here has numerous virtues:-The system is clearer, more easily understood and far more free of incentives to “game the system” than what we live with now-Businesses will have a more level playing field in the US and abroad – allowing decisions that reward the best product, the best service and the best ideas rather than rewarding tax management-Individuals have an incentive to save and invest.  Short-term consumption is no longer more advantageous than long-term saving.  If taxes take away future value, people make short-term decisions.  Preserving and growing value is simply a more logical approach – this book lays out a path to meet that objectiveThe US economy deserves a better tax system.  We need a system that supports intelligent decisions by businesses and individuals.  We need a system like this.”-David  A. OsterndorfChief Actuary – Towers Watson Member - Board of Actuaries, US Department of Defense Medicare Eligible Retiree Health Care Fund“At a time when most Americans are discontented with the current tax system, there is a need for fresh ideas for overhauling the Internal Revenue Code. Many feel the current tax system is a drag on the economy because of its extreme complexity resulting in excessive costs of compliance to individuals and corporations and the enforcement problems associated with the Internal Revenue Service. There are many ideas for reform but most focus on simplifying the current tax code. Past experience in reforming the tax code has generally resulted in creative revisions to the code to satisfy the needs of special interest groups. In Sensible Tax Reform, Professor Korth has developed a unique plan that will eliminate most of the complications of our current system. His plan completely eliminates the corporate income tax, Social Security and Medicare taxes on both businesses and individuals, personal income taxes on all except the very wealthy and estate taxes. They will be replaced by a federal consumption tax and a tax on the personal income of those earning more than $1 million annually.   Korth's plan is revenue neutral and addresses the issue of transition to his proposed plan. Sensible Tax Reform offers a sophisticated proposal for tax reform and is consequently a must read for anyone interested in making our tax system simpler and more fair.”  -R. Austin Daily, Ph.D., CPAProfessor of Accounting (retired)Texas A&M Unioversity

• PrefacePart A. The Problem--Our Current Tax RegimeChapter 1 An Unbelievable Mess!Chapter 2 The Burden of the American Tax SystemChapter 3 Taxes! Taxes! and More Taxes!Chapter 4 Lies, Damned Lies & the Federal Tax-Writing ProcessPart B. The Solution--Sensible Tax Reform: Simple, Just and EffectiveChapter 5 Tax Simplification, Justice and EffectivenessChapter 6 Federal Consumption TaxChapter 7 A Simple-and-Just Federal Tax on Very High IncomesPart C. The Impact of the Sensible Tax Reform Tax PlanChapter 8 Sensible Tax Reform and American FamiliesChapter 9 Sensible Tax Reform for American BusinessesChapter 10 Sensible Tax Reform for the American GovernmentPart D. Making Sensible Tax Reform WorkChapter 11 Transition to Sensible Tax ReformChapter 12 Is Sensible Tax Reform Right for America?Bibliography