nnuut
Moderator | TSP Legend
The Pros and Cons of the Flat Tax
February 01, 2008 by
Matthew Ryan Matthew Ryan
For a long time (roughly 20 years now), I've been a supporter of the Flat Tax here in the United States. I've always been good at math, and I've always been in a low-income tax bracket, so I don't dread tax time quite as much as other Americans might. And now, with all the computer
programs designed for taxation purposes, there is less reason for anyone to dread the Tax Man. Regardless, paying taxes is always something of a chore for me, that I would rather do without. There are so many rules and exceptions to follow. So to me, a simplified tax code is the way to go. And it is difficult to get much simpler than a flat tax, a single flat rate that all taxpayers pay on their taxable income.
There are many benefits to a flat tax rate. Efficiency is probably the most compelling. More complicated tax systems require complicated algorithms and long lists of rules to follow. They don't cost money to fill out (unless you are doing them on-line), but they do cost time. They cost time to fill out and time to be processed. A flat-tax system would cut that time dramatically, and all those man-hours saved could be spent doing something far more productive.
However, there are some very real, not so obvious, consequences to making such a dramatic change in our tax system. The first would be the almost complete dissolution of the IRS. The IRS is not just a governmental institution bent on inspiring fear in the citizenry; it is composed of people whose livelihood comes from working in the tax industry. Most of them would lose their jobs. Some people have suggested we could retrain them and send them down to the border to enforce it, so perhaps that is one possible solution.
However, there is a key word in the above paragraph that points to the problems that would result from implementing a flat tax suddenly. It is "tax industry." [More]
http://www.associatedcontent.com/article/568641/the_pros_and_cons_of_the_flat_tax.html
