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This is the Cato Daily podcast for Tuesday, April 15th, 2025. I'm Caleb Brown. It's Tax Day. Sorry.

One reform that would do a great deal to clarify to every taxpayer just how much the government takes is to end federal withholding.

The idea deserves more attention and Cato's Adam Michelle has a few ways to get the bowl rolling.

Adam, we're recording this in advance of tax day.

So happy tax day, question mark, to all those who celebrate involuntarily.

Give us the most important contours when we think about the income tax and who pays it and in many cases, who doesn't?

A great place to start in that I think on tax day we focus on the income tax, but that's only

half of federal revenue. We also have the payroll tax and the corporate income tax and

tariffs are in the news. That also is a source of revenue.

But the income tax is the one that you're complying with on tax day. And it's an incredibly

progressive tax. Higher income people pay a disproportionate share of the income tax. And sort of according to treasury data, the lowest income

Americans, they'll bottom 10, 20 percent pay on average, sort of no or negative tax rates are actually

net beneficiaries of the tax system. So negative income tax. This was, you know, a long time ago, an idea that

Milton Friedman and later Bill Clinton both advanced for lower income Americans, the idea

being that people who work should be incentivized to work. As a general matter, how do you view that?

We are so far away from that world.

It looks very much like a sort of universal basic income.

I don't think that is the right direction to be moving the fiscal system.

I want a sort of low flat rate that applies to everyone with maybe an exemption for

your first X dollars earned. And that should be the sort of ideal that we're pushing for. If we want

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