A few thoughts on a flat tax
If you institute a flat tax, you must eliminate "loopholes", shelters and incentives from the Code. Because such provisions inherently affect those with disposable income to take advantage of them, to include them in a flat tax would cause the actual tax paid by low-income individuals to be a significantly higher percentage of their income. I am inherently opposed to a regressive tax scheme such as this.
The government (rightly or wrongly) uses provisions of the Tax Code to incentivize certain behavior (e.g., saving for retirement). Eliminating such incentives, without replacing them in some way, would negatively impact those behaviors (e.g., people wouldn't save for retirement).
...The standard response to this is "tough luck. personal responsibility." Intellectually, I agree with this. However, 30 years down the line, when grandma starts starving (through her own poor planning), the government at that time will step in to save her. There's no political alternative, IMO.
...That means government money.
...That means more taxes...
...Aaaaaand we're right back where we started from.
posted by Steve72 @ 7:51 PM
2 comments
2 Comments:
what do you think about replacing income tax with a national sales tax?
I am opposed to it for several reasons. First, it falls victim to the same difficulties described above. Now, depending on how you describe "sales", that could be avoided (for example, making investments exempt, or giving them tax advantages could encourage savings). However, wehen you do that, you necessarily increase the tax that must be applied on the remainder of the sales (e.g., consumer goods). This, again, inherently affects those with less disposable income.
I suppose you could exempt necessities as well, but if you do that, you're really going to have a narrow swath of products that can be taxed.
Additionally, at core, our economy is based on people buying stuff. Taxing stuff inherently discourages people from buying stuff (even if they have more disposable income to use on stuff). If you discourage the purchase of stuff, you will suppress the economy as a whole.
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