The Federalist papers (high 20's and early 30's, if I recall correctly) have some really interesting views on taxation. The groups who advocated for the Constitution of 1787 believed the federal government should--and would--focus on taxes of consumption. The natural virtue of such taxes, they argued, is that there were self-regulating. If the taxes became too high, it would drive down demand for the goods or services being taxed, and would thus naturally reduce the revenue.
Interestingly, they believed that unequal taxation could not last: representatives of the heavier taxed would advocate for their constituents, and so over time the tax burden would be roughly equal to the means of those taxed. Unfortunately, they didn't account for stratification within representative's constituencies. Which brings us to the present, where the poorer Americans pay very little if any taxes, and reap enormous subidies on everything from education to heating oil, the very wealthy have a high nominal tax, but enough ways to move it around their effective tax rate can be between 20-30%, and the middle class, which has it's tax rate between 25-35%. The middle class gets exactly three subsidies:
1. Interest payments on a home
2. Child tax credit (nominal in effect - doesn't drive behavior or influence things, really)
3, Health insurance (if they have it)
I don't buy the argument that union benefits as a subsidized tax break. Love 'em or hate 'em, union benefits are paid for in the form of dues, which generally are higher than the cost of services provided. Otherwise unions would all be insolvent. Therefore they're not income, and taxing them (as in a current proposal) amounts to a new consumption tax on a particular service.
Just my 2 cents, of course.
