I'd agree, except for the concept of a "Prebate", which is supposed to be a minimum income available to low-income people. The value of the prebate is determined by Congress, and once you do that, you're right back where you started from. Either remove the prebate or can the Fair Tax.
I'll go with Milton Friedman's 17% flat tax on all sources of income. If you have wage, interest, dividend, or capital gain income, the distributing institution withholds 17% and sends it to the new Tax Collections department, since the IRS is now defunct. Your new Federal Tax form now fits on a postcard and the Tax Code is one sentence long: You owe us 17% of all income. Done.
[ Better yet, get rid of the IRS and go with the Fair Tax.
I’d agree, except for the concept of a “Prebate”, which is supposed to be a minimum income available to low-income people. The value of the prebate is determined by Congress, and once you do that, you’re right back where you started from. Either remove the prebate or can the Fair Tax.
I’ll go with Milton Friedman’s 17% flat tax on all sources of income. If you have wage, interest, dividend, or capital gain income, the distributing institution withholds 17% and sends it to the new Tax Collections department, since the IRS is now defunct. Your new Federal Tax form now fits on a postcard and the Tax Code is one sentence long: You owe us 17% of all income. Done. ]
I rather like a 10% Flat Tariff on all imported goods.
I call BS on the idea that this will simplify anything. The big question is always how do you define 'income'. For the average employed person, the 1040EZ is already pretty simple. For somebody with money, the question of what is income, what is deductible, will always be there. And for business, there will always be the need for accountants to keep track of deductible and non-deductible expense.
All the work of the income tax is deciding what is income. Working out the final tax from the tax tables or tax brackets is a couple of minutes.
Milton Friedman was blowing smoke. Any form of income tax is evil, as it gives the government control over your life.
I like that.
But I like taxing consumption better than taxing productivity...
“I’d agree, except for the concept of a “Prebate”, which is supposed to be a minimum income available to low-income people.”
Nope, the prebate is a refund for the taxes paid at a borderline poverty level of spending. That makes the Fair Tax less regressive (penalizing to lower income folk) than any type of flat tax. It’s a means of not having to categorize various things as “not taxable” like food. Is candy food or not? Is soda? Etc. Everyone who cares to, regardless of income level, can receive the prebate.
I don’t particularly love it either, but no purely regressive tax is going to fly.