>>>>I suggested also that we go to a 17% flat tax, and this was immediately ridiculed by some as being unrealistic and not backed by numbers. There are some pretty well informed individuals pushing for a flat tax and using this number -- unless refuted by a fully credentialed analyst, I would prefer to believe their analyses.
Well, how about its # 1 proponent, Dick Armey. From his website:
>>>>The latest Treasury study finds that a tax rate of 20.8 percent would be required for the proposal to be revenue neutral. The Treasury report highlights its projection that at the 17 percent rate, the proposal would lose $138 billion -- ignoring the fact that the bill provides for an initial rate of 20 percent and spending reductions.
Requires about a 21% rate to be revenue neutral. And Armey plans for unnamed 'spending reductions' to pay for it. Just like you want to use 'spending reductions' to pay for current SS expenditures. Just like CATO wants to do for its program. I see a pattern here. Everybody wants to pay for their 'wonderful' program by cutting somebody else's program. Folks, there is no free lunch.
>>>>However, regardless of the actual rate that would be required, the proportion of income tax revenues that is used just to enforce the tax laws, coupled with the amount of time and effort that is required by the public to comply with them, amounts to a tremendous waste of money -- money that would be saved with a flat tax. Further, a flat tax would eliminate all of the current loopholes that are used only by those who can afford accountants to reduce their taxes.
But the flat tax does none of that. Tax simplification does that. Simplification does not require a single rate. If the tax form were to include a tax table, multiple rates make it no more complicated. And even if they don't, a calculator is awful cheap. And the flat tax only taxes wages and pensions. Not dividends nor interest nor capital gains. The worker's tax on his wages will have to make that up.
