I’m a long-time proponent of the flat tax for three simple reasons.
1. It replaces the discriminatory “progressive” tax with a single tax rate at the lowest possible level, Thus reducing the tax penalty on productive behavior.
3. Other than a family-based allowance, it gets rid of all loopholes, deductions, credits, exemptions, exclusions, and preferences, meaning economic activity is taxed equally.
Some people say that these are also three reasons to favor a national sales tax.
My response is that they’re correct. In simple terms, a national sales tax (such as the Fair Tax) is like a flat tax but with a different collection point.
If you want more details, I often explain the two plans are different sides of the same coin. The only difference is that the flat tax takes of slice of your income as you earn it and the sales tax takes a slice of your income as you spend it. But neither plan has any double taxation of income that is saved and invested. And neither plan has loopholes to lure people into making economically irrational decisions.
Instead of class warfare and/or social engineering, both plans are designed toraise money is the least-damaging fashion possible.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for September 17th, 2014 | John Ransom
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Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for September 15th, 2014 | John Ransom