The Cato Institute’s Dan Mitchell wants to replace the IRC with a flat tax. Dr. Mitchell also advises shrinking the size of the federal government so that it only funds the core public goods, such as national defense and the rule of law, envisioned by America’s Founding Fathers.
As a fiscal policy economist who believes in individual liberty and personal responsibility, I have two goals.
Needless to say, I haven’t been doing a great job. The tax code seems to get worse every year, and even though we’ve made some progress in recent years on spending, the long-run outlook is still very grim because there’s hasn’t beengenuine entitlement reform.
But I continue with my Sisyphean task. And part of my efforts include educating people about the Rahn Curve, which is sort of the spending version of the Laffer Curve. it shows the non-linear relationship between the size of government and economic performance.
But as politicians learn to buy votes and enhance their power by engaging in redistribution, then government spending is associated with weaker economic performance because of perverse incentives and widespread misallocation of resources.