08-10-2011, 12:58 PM
Grace62 wrote:
[quote=Ted King]
[quote=Grace62]
Even the great acolytes of the flat tax: Steve Forbes, FreedomWorks, the Heritage Foundation, etc., include standard deductions, marital status, and deductions for children. The rate they use is 17%. Some also consider a minimum income amount below which you are not taxed at all, or taxed at a lower rate.
So even among its most ardent and true fans, the realities set in.
I think it's the "flat" part of the flat tax structures that people like Forbes are mostly interested in. The "less deduction" part they throw in with it (you could have flat rates even with all the deductions we have now) is just to get people to associate "flat tax" with "simplified tax structure". But since there is essentially no difference between the complexity of a progressively stepped tax structure and a flat tax structure if both allow and/or disallow the same deductions, the association between flat tax structure and simplification is just a ruse. Either that or they are being made so stupid by their ideology that they can't see that there isn't any connection between flat and simple tax structures that couldn't be essentially the same with a progressive stepped structure and simplification.
Well, looking directly at what FreedomWorks says on their site, it's simplification that they are after. "Flat tax" is part of that because it results in lower taxes for the wealthiest Americans, which is the foundational reason for FW's existence.
From your link:
Switching to a flat tax would make it simple to pay taxes, saving everyone time and money. Under a flat tax, filing taxes would take mere minutes, and decreasing compliance costs would improve the economy; all of those billions of hours we spend filing taxes could be put to productive use. Go ahead and compute your flat tax below, keeping in mind the time that you save in filling out a simple form, and that economic growth will improve your income situation immensely.
It's true that it doesn't explicitly say that only that the only simple taxes are flat taxes, but in total it is expressed in a way that gives the impression that simple tax = flat tax. But, if you are going to call a tax that contains deductions for children a flat tax, then that means that taxes that have deductions can be called flat taxes and that means that even a tax system that has all the deductions we do now but where the rates are not more or less for any income group would still be a flat tax. IOW, there is nothing inherent in a flat tax that makes it simpler. And yet, that is what that paragraph implies. It is very misleading.
The reason this concerns me is that I am sure that fiscal conservatives are going to make every effort to reinforce as much as possible the misconception that flat taxes are inherently simpler AND the misconception that the only simple tax is a flat tax. Republicans are experts at making sure such misconceptions become the narrative/conventional wisdom and Democrats will be left standing like deer in the headlights.... again (like the union workers in Wisconsin who voted for Walker).