Skip to comments.Flat Tax is Gaining Steam Again
Posted on 10/23/2011 10:38:33 PM PDT by casinva
FreedomWorks Chairman and former House Majority Leader Dick Armey led the fight for the flat tax on Capitol Hill in the 1990s. FreedomWorks, previously known as Citizens for a Sound Economy (CSE), stood with Armey and his efforts to repeal todays complicated income tax system. CSE even embarked on a nationwide Scrap the Code tour to generate support for overhauling the tax code. With the rise of the Tea Party movement, the flat tax has a greater chance of passing this time around. The flat tax is gaining steam again with at least one major presidential candidate and congressional leaders on the hill backing this more sensible policy.
The current tax code is far too complicated, long and punitive. The U.S. currently has six income tax brackets ranging from 10 to 35 percent. The more money that you earn, the higher percentage of taxes you are forced to pay Uncle Sam. According to the IRS, the average American taxpayer spends 26.5 hours preparing and sending in their taxes. The tax code is a 60,000-page catalog of favors for special interests. I may not agree with him on much else but former President Jimmy Carter said it best, our income tax system is a disgrace to the human race.
A flat tax would be a significant improvement from the status quo. It means that individuals would be taxed at one low rate. One of the most common proposals is a 17 percent flat tax with a $36,000 income tax exemption for a family of four. A flat tax would get rid of special interest preferences and tax loopholes that lobbyists have built into the tax code overtime. Individuals would be able to file their taxes in just five minutes on a form the size of a postcard. Small businesses could concentrate on expanding their business rather than jumping through hoops in the tax code. Its much simpler and flatter system that will end double taxation on savings to help boost job growth.
A low flat tax is a step in the right direction and a huge upgrade from the current tax code. With a grassroots army and congressional representatives willing to lead the charge, it is politically feasible.
Included at the link is a short video of Dick Armey advocating for a flat tax back in 2007.
Well indeed it does, and Dick Armey, chairman of FreedomWorks, a grassroots group closely aligned with the small-government Tea Party movement, says there are a lot of other benefits we'll be seeing with a flat tax tax reform approach too.
Why does this grassroots Tea Party organization support the basic driving principle behind Rick Perry's tax reform plan?
The flat tax is the only workable solution for supporting limited government.
I support the flat tax idea but to work it must be completely flat. That is to say everyone pays the exact same percentage on income whether they make one dollar or a billion dollars. No exemptions, no deductions, no credits, no nothing. Just a simple calculation X dollars of income times X percent. As soon as you start adding in exemptions, deductions etc. you are headed right back to where we are now.
Also I think we should start with a percentage that is a maximum of 10% or lower if possible. Starting with the number we then adjust the size of government to fit the revenue. In other words we start cutting government workers from all areas until we get to a size government that can be paid for with 10% or less income tax. Forget about figuring out some scheme to fund the government we have.
I would go for the flat tax over Cain’s 999 nonsense.
Does the flat tax affect illegals that get paid cash?
I saw an interview the other day with Neil Cavuto and Steve Forbes who has been working with Rick Perry on the Flat Tax concept, and Mr. Forbes said a tax return form under this plan would not come close to filling even one page. I have such a hard time even imagining that! LOL
I guess we’ll see what is involved (or not involved) this Tuesday when Governor Perry gives his speech to debut this package (followed by pdfs and interviews, no doubt), and then we’ll have a better idea of the kinds of specifics you mentioned here, if they are present or not, etc.
Keep an eye out this Tuesday!
I thought a flat tax was a head tax. If you graph the tax amount vs. income, or any other personal variable, you get a flat line, hence the term, like a flat fee. We all understand what a flat fee is, don’t we?
A fixed RATE of taxation is a linear tax. Its graph vs. income, or whatever base amount is being taxed, is a straight line with constant slope, but it’s not flat.
The use of the “flat tax” term for a proportional tax represents to me a gross surrender to the forces of progressivism.
Now that Cain has broached the subject with his 999 plan, this has become fair game. I hope it does not all break down into a cacophony of infinite variations, leaving us with the status quo.
Anyone who thinks a flat tax will get through congress is either dreaming or smoking crack.
No way those political whores will cut down their money tree.
Maybe I’m being to cynical...
Exactly. Selling loopholes and deductions is the lifeblood of a political campaign. As for a flat tax, will there still be two categories, income and capital gains?
Russia’s Vladimir Putin saw to the enactment of a 13 percent flat income tax in Russia. It boosted federal revenues and turned a deficit into a surplus. Russia is now very competitive in the global market. While America remains handcuffed by a progressive income tax system that has remained unchanged since the early 20th Century. Its time for a change.
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My guess is he vast majority of TEA Partiers,
a. support one or the other of the Fair Tax or the Flat tax,
b. think either plan would be much better than what we have now,
c. do NOT want the Flat Tax AND the Fair Tax at the same time. (999)
Thank you for your comment!
After reading your post, I took a few moments to do a search on “Vladimir Putin and flat tax”, and when I did that, I saw an article there about that by the Heritage Foundation. Obviously that was the first click I went for!
Here is that link:
Russia’s Flat Tax Miracle
By Daniel Mitchell, Ph.D.
The Heritage Foundation
Wow, what a resounding endorsement of flat tax reform. I was amazed to see what differences a flat tax policy did for Russia.
However, the author for the Heritage Foundation article, Dr. Daniel Mitchell, certainly also pointed out how The U.S. was not the recipient of the same flat tax miracle seen in those places of the world that were adopting such a method of taxing.
We have had attempts by conservatives in the past to get flat tax reform going in our country, knowing that it can be a definite pro-growth and anti-crony, more honest approach for our tax system. In those earlier years, our country had no luck getting it implemented.
However, I believe we have a real shot at tax reform this time around. Conservative principles are much more widely accepted these days by even more than political conservatives, and the Tea Party has given us an additional strong voice we have never had before.
Again, thank you for bringing that historical information here. I enjoyed finding out more about that, and I hope your comment spurs other people here to do some of their own research on OTHER flat tax “miracles” as we begin our country’s drive to have a real miracle of our own!
A flat tax was and is a great idea. Beats a sales tax/income tax combo.
There are many elders who worked when $5,000 a year was a good pay. What little they could save for their retirement isn’t enough to allow for a 17% income tax. They would be put on Welfare, thus increasing the cost of government.
“I’m not sure what you are saying. They would be on Social security would they not? Are you already falling for the starving seniors lie?”
Perhaps I didn’t make my point clear. Yes, they would be on Social Security. BUT the S.S. would be based on their earnings back when $5,000 a year was good pay. $10,000 a year in S.S. is not unusual.
20% plus 7.65% employee fica plus 7.65% employer “contribution”. I’d call that 35%. Not that the number matters so much but let’s be truthful.
Taxes will remain hidden in higher prices, lower wages, and/or reduced ROI because that’s the ONLY place for business taxes to manifest.
Tax costs will still be in our exports [even though our competitors have figured what tax system to use to avoid this - the flat income tax is not border-ajustable.]
There will still be a ton of folks who pay nothing.
Better than our current system but not by much. Like a terminal patient whose medicine buys him another 3 months, the flat income tax [actually a subtraction method VAT] only buys a little time until it starts all over. But like I said, 3 months is better than no months.
I prefer elimination of the income tax code, repeal of the 16th amendment, and a flat retail sales tax.
I suggest a much simpler approach.
That would allow taxpayers who also are wage earners the privilege of ACTUALLY SEEING how much in income taxes they are paying.
Everything else would take care of itself.
I agree about the need to end withholding.