The flat tax would work if they would just leave it at that, a "flat tax".
Work? to what end?
Definitely not to keep government growth in bounds. Not while it allows taxation to be hidden behind a veil of inflation by taxing business and corportions, or otherwise disguise taxes with labels pretending to be something other than what they are, A burden on every citizen.
It definitely does not work to preserve or increase personal liberty, or privacy of the citizen. Any income tax no matter how cleverly contrived must of necessity demand proof of the financial state and earnings of all citizens to be enforcible.
Income taxes are especially onerous for they lay an affirmative burden to report and prove creating a legal jeopardy that can be exploited at whim by the unscrupulous.
The fundmental issues of taxation have been known for hundreds of years and income taxes, capitations and property taxes imposed on individual owners have always been the worst of all mechanisms for the job of raising revenues "to pay the debts and provide for the common defense and general welfare of the United States;"
Adam Smith in, The Wealth of Nations (Book V, Chapter II), laid out four things to be considered as guiding principles in designing an appropriate tax system -
I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state . . . .
II. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person . . . .
III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it . . . .
IV. Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state . . . ."
An Income tax(i.e. Flat Tax), no matter how carefully constucted, falls short on all counts.
Furtheremore , in Wealth of Nations pp. 561-64, he had this to say about bad taxes:
1. A tax was bad that required a large bureaucracy for administration.
2. A tax was bad that "may obstruct the industry of the people, and discouraged them form applying to certain branches which might give maintenance and employment to great multitudes. While it obliges the people to pay, it may thus diminish, or perhaps destroy, some of the funds which might enable them more easily to do so."
3. A tax was bad that encouraged evasion. "The law, contrary all the ordinary principals of justice, first creates the temptation, and then punishes those who yield to it. "Evasion is also bad, says Smith, because it tends to "put an end to the benefits which the community might have received from the employment of their capitals."
4. A tax is bad that put the people through "odious examinations of the tax-gatherers, and exposes them to much unnecessary trouble, vexation, and oppression...It is in one or other of these four different ways that taxes are frequently so much more burdensome to the people than they are beneficial to the sovereign"
Unfortunately, Income Taxes, whether they be flat round or otherwise meet these conditions all to readily.
The Intent of the individual income tax is for political and social control not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country perpetual legal jeopardy.
That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.
You cannot do that and maintain any income tax on the books, Flat or otherwise.
I don't see how a simple (I'm going to call it "simple" to separate it from the contorted one you posted details to earlier) flat tax wouldn't fit into this container. For example, I made from all sources of income say 50K last year. I then have to pay 5K on November 1st (Nov 1st so that we're fresh out of paying before voting), That's it. No deductions, exemptions, write offs or entitlements. Sounds "sound" to me.
II. The tax which each individual is bound to pay ought to be certain, and not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person . . . .
See above. Seems to pretty clear cut and simple to me.
III. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it . . . .
Is there ever a convenient time to pay taxes? There is no way to make paying taxes convenient or enjoyable. I'm not too sure why this statement is used as pre-qualification.
IV. Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state . . . ."
Makes sense. But this factor currently resided within our EO's power to implement. Somthing like super-super majority should be required to raise taxes. Say 90% of the congress must agree to raise taxes.
An Income tax(i.e. Flat Tax), no matter how carefully constucted, falls short on all counts.
Obviously I disagree. But definately look forward to more information from you as you seem very knowlegable.
Furtheremore , in Wealth of Nations pp. 561-64, he had this to say about bad taxes:
1. A tax was bad that required a large bureaucracy for administration.
Wouldn't a large bureau be required to make sure that manufaturers, service providers and retailers collect taxes from sales? IMO it would have to be larger than that needed for a flat tax scenario.
2. A tax was bad that "may obstruct the industry of the people, and discouraged them form applying to certain branches which might give maintenance and employment to great multitudes. While it obliges the people to pay, it may thus diminish, or perhaps destroy, some of the funds which might enable them more easily to do so."
All taxes, in all formes discourage industry. Sales taxes hamper sales. Property taxes hamper property ownership. Income taxes hamper all of the above. All taxes restrict disposable income.
3. A tax was bad that encouraged evasion. "The law, contrary all the ordinary principals of justice, first creates the temptation, and then punishes those who yield to it. "Evasion is also bad, says Smith, because it tends to "put an end to the benefits which the community might have received from the employment of their capitals."
All taxes encourage evasion. If we, here in Oregon, had a sales tax I would shoot more deer and start a garden in my back yard to avoid taxes. I would think that a simple flat tax would be harder to evade because of the two party conspiratory actions required to accomplish it (employer and employee).
4. A tax is bad that put the people through "odious examinations of the tax-gatherers, and exposes them to much unnecessary trouble, vexation, and oppression...It is in one or other of these four different ways that taxes are frequently so much more burdensome to the people than they are beneficial to the sovereign"
This is a plus for the NRST. Private folks will never have to be interrogated by the tax man. The interrogation burrden will fall squarely upon the shoulders of the producers. I'm not sure that's a better scenario but at least my "ox" would be safe.
I'm not convinced that the NRST is far superior (or superior at all for that matter) to a "simple" flat tax system. The SFT (simple flat tax) would be fair and equitable but would of course not sound the bell for the IRS.
EBUCK