Flat tax

Every four years at least one Republican candidate can be counted on the introduce the idea of the flat tax.  The arguments advanced are, first, that the flat tax is fair, taxing everyone equally; and second, that it is simple, allowing us to get rid of all the complicated regulations contained in the present I.R.S. code. 

Let’s address the fairness issue first.  A flat tax will make the rich richer.  According to the recent Congressional Budget Office study, the top 1% of income recipients received (I refuse to use the term “earned”) 275% more in 2007 that they did in 1979, adjusted for inflation.  In this same period earnings for middle class households increased by less than 40%.  Some flat taxers like Herman Cain would make matters even worse, excluding dividends and imposing the flat tax a tax on wages alone.

The simplicity argument is completely bogus.  I do my own taxes.  Once I have my income figured out, I turn to the tax table and find what I owe.  I can do that in less than two minutes.  I could put that on three lines on a postcard.  1. income.  2.  tax from table.  3.  amount owed.  The problem is figuring out what my income is.  That takes hours and hours.  Do I count Carbon County fair winnings?  What about the yard sale profits?  Scrap metal sales?  Do I count every retirement benefit?  Can I deduct medical costs or the college fund for my grandson?  I will have to do the same thing with a flat tax.

Not one of the Republicans who tout the simplicity of the flat tax explain how it will eliminate the problem of determining income.  Because it won’t.