Larry Kudlow Doesn't Like Tax Credits

The zillions of tax credits legislated by Congress down throughout the years have caused the taxable income base to shrink significantly, causing higher tax rates for everyone.

These narrow-minded special interest tax favors should be abolished as part of broad based tax reform in order to slash marginal tax rates.

Kudlow references this blog post from the Tax Foundation's Tax Policy Blog that claims that by eliminating all tax credits the average tax rate would fall by more than half:

The current system requires six tax rates ranging from 10 percent to 35 percent to raise the $912 billion in federal individual income tax revenue expected in 2005. That amounts to an average tax rate of 19.5 percent. If all personal income were taxed instead, the same revenue could be raised with rates ranging from just 4 percent to 17 percent. That would amount to an average tax rate of just 9 percent—less than half the current effective rate.