Flat Tax Rate. The next round of the U.S. election system circus is already underway and will only intensify in the months leading up to the U.S. Congress mid-term elections in November. One of the tried and true democratic campaign slogans is being rolled yet again. Tax the Rich. Since the non-rich constitute somewhere around 90% or more of the overall population, it is an easy, uncomplicated platform for the Democratic Party and its candidates. The problem is, it never happens, it won’t solve anything and its purely hot air. How dumb can the electorate be?
I wrote a blog at the beginning of 2022 suggesting that, if anyone truly wants to change the U.S. tax system, make it more equitable, and, at the same time, raise more money, there is a simple solution. A flat tax rate. It might even be a solution that would be much easier to defend and much harder to attack from a political point of view. It would, however, take away the Democrats’ most successful campaign slogan.
I decided that it was a suggestion worth repeating again and again, so “here beginneth the second lesson.”
Tax reform is always on politicians’ agendas, but never to make the system simpler. Why would they do that? Most of them are lawyers, and the more complicated the system, the more money their lawyer colleagues make.
The simple solution to tax reform is a flat tax rate, covering everyone. No exceptions, no exemptions, no deferments, and no deductions. In fact, one simple number for everyone…..let’s say 10% of all your income, regardless of where it comes from. Income is income, so it doesn’t matter if you receive $10,000 a year or $250 million a year, you pay 10%, period.
Advantages of this simple system:
1. It is equitable across the board. Everyone pays it, so everyone participates by paying their fair share.
2. It simplifies the entire system (although the lawyers and accountants will argue forcefully that it doesn’t) and would considerably reduce the cost of the IRS, raising even more money for the Federal budget.
3. If you cheat, you pay 20% for that year, no appeals, no lawsuits and no comeback.
4. The actual percentage (my guess is 10%) would be subject to a detailed, and transparent analysis by the Federal Budget Office.
5. The rate would be subject to review every five years. The idea of this would be to compensate for the reality of tax requirements but also to take it out of the regular budget and, particularly, election cycles.
6. We could then apply the same principle to state and local taxes.
7. Democratic politicians would not be able to use their most successful rallying cry of “higher taxes for the rich”, which is total bullshit anyway in terms of the relative pittance it would actually raise, compared with the national budget. A little less mis-information for us victims of political rhetoric, which would be a blessing.
8. We might even be able to reduce the numbers of lawyers and accountants in the country; the U.S., according to some sources, employs over 70% of the world’s lawyers, which ought to be criminal in-of-itself.
I could go on and on.
Disadvantages of this simple system:
All it would take is the political will to put the future of the country and its people ahead of personal gain and re-election strategy.
Chances of that happening in today’s political environment, at any level…..Nil.
BUT WE HAVE TO TRY.
Just a thought. If we could change U.S. Presidential elections so the President was elected by the vote of the people, a candidate running on a campaign to introduce a flat, equal and equitable tax rate would almost be guaranteed to win. Definitely food for thought.