Tuesday, April 6, 2010

Flat Tax

For at least fifty years conservatives have been supporting reform of our tax structure. One of the most popular ideas that has been around for a while is to switch from the current labyrinthine complexity to a simple flat tax. The flat tax has so many advantages that it's hard to understand why we don't adopt it, other than that too many powerful people make too much money off the current system. The flat tax would replace all the confusing forms, deductions, regulations, exceptions, etc. with one simple post card size form. Instead of pages and pages of tax tables everyone would simply pay 17% of their gross income in taxes. The guy who makes 100 times what you make would pay 100 times more than you pay.

The Cato Institute has put together this video with Dan Mitchell to briefly explain how a flat tax works and what its advantages are:

Not the least of the advantages would be that the bloated IRS would be reduced in size to a fraction of its current bulk.

Another option that has excited a lot of people is something called the Fair Tax. It, too, would be a great improvement over the current system, but it might require repeal of the 16th amendment. In any event, the current system is nothing more than a full-employment mechanism for the IRS and tax lawyers. There are better, more just ways, of doing raising revenue, and we should implement them.