The flat tax is getting a revival tomorrow on Capitol Hill from its best-known champion.
Steve Forbes, editor-in-chief of Forbes magazine and a Republican presidential candidate in 1996 and 2000, will speak in support of the plan as fiscal cliff negotiations hinge on what the tax rates will be for different income brackets.
Forbes will be joined at a press conference outside the Capitol by Reagan-era Economic Policy Advisory Board member Art Laffer, Sen. Mike (R-Utah), and Rep. Louie Gohmert (R-Texas). Others are expected as well.
All will be expressing their support for moving to a flat tax system.
“There are a number of proposals I agree with in principle that would simplify the federal tax code. For example, a consumption tax and a flat income tax would vastly reduce the compliance burden on taxpayers,” Lee says in his issues statement on tax reform. “Also, these plans would also remove the disincentives for businesses and individuals to be more productive and lead to greater economic growth, prosperity and job creation.”
Forbes endorsed Texas Gov. Rick Perry in the GOP presidential primaries but didn’t make a general election endorsement.
Bring it. Bring something! Anything!
sub-headline: very smart, brave guy meets in a room full of p*ssies.
I wouldn’t object to a consumption tax (say, all goods and services, excluding food, clothing, primary residential real estate and medical care) but it would have to be coupled with repeal of the 16th Amendment and explicit constitutional language denying the federal government an ability to tax income.
It the spending, Stupid! Please don’t distract us with your opportunistic tax reform proposals until the out of control government spending is addressed.
“The flat tax is getting a revival tomorrow on Capitol Hill from its best-known champion.”
A wonderful thing.
A sales tax must never happen in this country–it is not government’s job to move money between economic classes, and a sales tax must either be the foundation of an enormous bureaucracy, or drastically regressive. Sales taxes are a terrible idea, and states should do away with them, the feds should not adopt one.
I am a proponent of either a flat tax or a consumtion tax on individual income. The structure is more readily in place through the current IRS making it more adapatable and predictable. However for me to buy in, all deductions should be permanently removed except for a single basic home mortgage deduction, basic food items, necessary out of pocket medical and education and estate tax exemptions on the first 5M. Nothing more!
On the other hand, comsumption tax (not VAT)again puts ‘everbody’ into the skin game within a self controlled progressive framework up to the optional age of 65 to 70. I’m really more inclined to support a consumer tax over flat tax because consumption of ‘non basic consumer goods’ returns at least a small portion to the government by those ‘taking’ from the taxpayers.
Everyone with a source of income should be paying something in taxes to support the government.
Then there remains the whole issue of government spending to be resolved. But I honestly don’t thing that issue can be seriously resolved until serious tax reforms are made.
“The structure is more readily in place through the current IRS making it more adapatable and predictable.”
1% it’s current size or smaller, too.
“Everyone with a source of income should be paying something in taxes to support the government.”
Yes, income is what is produced in the country, and is the best way to tie expenditure to a fraction of production.
Flat tax won’t work for two reasons:
Too easy to go from Flat tax back to staggered income tax by additions and credits and extra crap. It’d be a reset, but we’d return to the status quo sooner or later. It’s also Politically unpopular because “flat” is read as “regressive”.
Flat Consumption tax (Sales tax) is never going to happen because of the people on our end. You CANNOT give the government an extra tax, or it will never disappear. A sales tax could turn into a VAT, and the income tax would still be in place. Plus the questions of what exceptions to place things on (food, healthcare, utilities, etc) opens the door for a lot of lobbying, and political favors to special interest groups.
http://www.fairtax.org/site/PageServer?pagename=HowFairTaxWorks
The only solution so far I’ve seen that has political possibility, and merit is the Fairtax.
-Eliminate Income Tax, Payroll tax, & Corporate Tax
-Create a flat sales tax on EVERYTHING – ONCE. Retailers can buy wholesale tax free, and people can resell things like cars tax free.
-Provide a Prebate to every household of US citizens at the beginning of every month, that refunds the taxes spent on “basic necessities” as judged by the poverty line multiplied by the tax rate.
This combines two simple systems: a flat percentage consumer tax, and a flat rate prebate, and generates a progressive tax. 0% tax rate for poverty line, 50% of tax rate for spending at twice the poverty line, 75% for 4x poverty level, etc.
The system really is elegant. It’s progressive, so you have a shot at getting Democrat support, it frees corporations from idiotic taxes, and it removes the IRS and the idiotic amounts of money our country spends on tax compliance.
Few other of the many benefits:
-Tax can no longer be leveraged as special interest. There are no deductions, exceptions, Nothing. Congress can only control the tax rate. The same dial gets turned for everybody.
-Makes Federal taxes Visible. Every day, whenever anyone buys something, they will see right at the register what the federal government is costing them personally, so they can decide if they are getting their money’s worth. Starting rate is 30% tax rate (equivalent to a 23% income tax rate) which places most middle class families paying between 10% and 15% income tax – total. Pretty level with what they do already.
-Taxes illegal immigrants: Illegal residents pay sales tax (23%) but don’t get the prebate, so anyone undocumented is paying in the highest tax bracket.
-Compliance cost of ~$300 Billion spent annually just to figure out what numbers to write on check. Gone. Not to mention the time spent processing the tax, which hurts small business a lot more than large business.
-Removes the IRS, and charges the new taxing authority with collecting taxes from 20 million public businesses rather than 140 million private people. Easier to get audited, harder to commit fraud.
-Removes the corporate & capital gains tax rates. Money flows freely; invested freely, collected freely.
-Ability to alter your own tax rate by consuming less. Discourages consuming, rather than discouraging earning (ie producing).
The whole thing is really well put together. And you can read the entire bill in the span of 2 hours. Easy to understand, /almost/ impossible to manipulate (never underestimate Washington), progressive, visible, revenue-neutral.
Enough plugging. Read the FAQ on the fairtax.org site, or read the entire bill yourself, and then decide for yourself. How would you like a tax system that was designed on purpose, and won’t grow like wildfire?
I’ve heard all that before, and it’s still either not true or beside the point.
The “Fair Tax” is either not fair or it gives birth to a huge bureaucracy having the goal of preventing it from being “regressive”.
A single rate tax income tax is easier to keep as a single rate tax than is the “Fair Tax” is to not become a boondoggle or arcane ornate rules the Congress manipulates to let some people off the hook for some favored activity.
BTW “Discourages consuming, rather than discouraging earning (ie producing).”
That’s so economically stupid I can’t believe anyone ever wrote it. You never can discourage consuming without discouraging earning. Each is one side of every transaction.
Folks, what that fool wrote right there, that’s as smart as the “Fair Tax” gets.
A single rate income tax is the way to go.
We don’t have a revenue problem, we have a spending problem. Republicans trying to push for poor people to pay more taxes is not going to help their image nor win them elections.
A big part of our spending problem could be explained like this.
I’m po folk and go into a restaurant and order a nice dinner. When the waiter brings the ticket, you turn to him and say — “I’m po folk, give that bill to the owner to pay.”
We have about half of Americans receiving some forms of income who are not paying anything into the tax coffers but still want/demand they recieve the benefits of the taxes paid by others.
Okay, back to reality. Every society has a small portion of people ‘legitimately’ not capable of participating in the economy. To those goes the compassion of all and thus, we take from our good fortunes and help to provide for them.
A bit more reality. In America over several decades we have come to a point of far to many people able to provide in some way for their own care and yet we find them on the dole for government handouts. There are over a millions jobs vacancies this very moment in America but these people have been conditioned to believe they are to good for such jobs. There should be at least some strict terms and conditions for all able bodied Americans on the dole for government handouts.
Lastly, the government has abused the intent of social problems and expanded them well into ranges of income that is insulting to any rationale thinking person.
Every working American or one that has investment income up to the age of 65 should have skin in the game. Thats the whole idea of progressive tax rates.
To receive more or anything without a real tangible return on such investment creates arbitrary inflation hurting all classes. Labor unions and the government have created ALL the arbitrary inflation over many, many, decades.
Remember that $12 today has the same buying power as $1.43 in 1956.
These guys must be smoking crack cocaine to think that O’Bumbles and Harry Reid would ever agree to a flat tax. So what’s the point?
Just a bunch of political mouth music.
If the GOP wanted to cripple Obama it isn’t hard. Set the poor against the machinery of government one step at a time. They are too stupid and ignorant NOT to fall for it, heck they sold their souls for a free phone!
The IRS and tax compliance Bureaucracy costs about 450 Billion per year. If there was a flat tax, no deductions, you just paid it period, that would almost all go away.
So put a bill up that would completely dismantle this thing based on a flat tax, but here is the kicker, also promise to pay out that 450 Billion savings in direct payments to households that make less than 35K, which is about 10K per household for 4 years.
That demographic supports Obama more than any other and compromises about 43 million households or about 70 million potential votes.
Keep doing that kind of thing, bills that pass on the savings for reducing government size as direct payments to Obama supporters.
We control the purse strings right now, we can block everything until the dim’s start “helping” the poor etc.
The messaging would not be hard to concoct, they would try and spin this as a “Trick” and we would simply counter that no, we need to cut spending and stimulate the economy while helping the poorest among us.
The bill would be defeated, but we just need to keep telling people if they get rid of the dim’s, who hate the poor, and hate our country, then we will follow through, and we will.
Short term costs that there anyway to get long term results that would reshape the country.
It would be hysterical listening to the dim’s try to argue their way out of giving money to the very people they buy votes with on a regular basis.
Given that Congress has failed to act, we WILL have a flat tax this year and next that will affect a large number of taxpayers. It’s called the AMT.
It’s not going to happen. But do what the you can do;Step 1 should be elimination of the state tax deduction. Blue states across the board have high realty, sales and income taxes, red states mostly don’t.It’s unfair to have one set of fiscally-responsible citizens subsidize the fiscal profligacy of the rest. Instead of selling a flat tax that will never fly,fix a “loophole” that isn’t even controversial. And it will put The One on defense.
1. I wish Forbes would run against one of my NJ Senators – either the senile one or the corrupt one.
2. With Boehner purging the committees of conservatives, the Republicans couldn’t pass a flat-tax right now.
http://www.rollcall.com/news/gop_steering_committee_shuffles_conservatives-219601-1.html