Tax Reform

Hal Varian has a short article on tax reform in his NYTimes column.  I agree with him that one of the most desirable but also achievable reforms would be to expand and simplify "the current messy system of tax-deferred savings, including I.R.A.’s,
401(k)’s, 403’s and Keough plans. We do not really need all those
different plans and having one, simple tax-deferred savings plan would
make a lot of sense."

The graphic below shows how under the current system the marginal tax rate rises and falls arbitrarily.



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