NEW YORK ( TheStreet) -- The economy is not doing well. Unemployment is too high and big deficits threaten the credit worthiness of the federal government. Only genuine tax reform will make things right.With 46% of Americans paying no income taxes and many more who pay very little, it is no wonder federal spending is at record levels. It's simply too easy to vote for politicians who promise free health-care services and other worthy benefits by raising taxes on someone else -- the wealthy.
Over the comparable Reagan years, when taxes, especially on the well-off were lower but more voters paid at least some income taxes, unemployment peaked at 10.8% -- but the economy grew at 5.3%. Simply, with lower taxes on the wealthy and more voters with skin in the game, the federal government did less and the economy did better -- many more jobs were created and workers had more power to bargain for decent wages than they do now. The highest marginal federal tax bracket is about 40%, but with so few Americans paying significant taxes the average income tax rate is about 12%. To exercise some restraint on federal spending, why not require everyone to pay at least 6% of their income in taxes and set the maximum rate of 18%? That's about what Barack and Michelle Obama paid on their 2012 income. Folks in the middle would pay something in between so that the average take is still 12% of income.