by Michael McCune —
The normal person fears to tread the swampy ground of tax loopholes and deductions–that’s why the unofficial-official business of tax preparation and legal tax defense has been the biggest single growth sector since the 1950s.
Just to let you in on a little secret the government doesn’t want you to know: without the confusion in the tax laws not only would there be almost no demand for accountants or much for lawyers but the unemployment rate would much larger than it is. Keeping the Code confusing is in the best interests of the government, not in the best interests of the country’s citizens.
Because of this morass, the subject today is the flat-rate tax. A flat-rate without all those deductions and exemptions. A flat-rate tax that would provide the government with more funds with less paperwork. A flat-rate tax that, horrors, the average second grader would be able to figure out–assuming the poor child could still do basic math functions like multiply after spending three full years inside a public institution of lower learning!
Here’s The Rant’s proposed tax plan in a nutshell.
The government will provide every one with the standard, per person, poverty line that it has figured out with its army of useless accountants currently in the pay of the government. The tax return would consist of you and your dependents (with Social Security numbers), your address and your total income. You would then have to do some real serious math by multiplying the number of people on your return by the poverty-line rate. This amount would be deducted from your taxable income.
Based on the remaining amount you would either file for a refund (if the net income was negative) or pay a tax (if the net income was positive) at the flat rate tax determined for every earned dollar.
To conduct an audit the friendly auditor would merely confirm income and count noses. For a business without employees the procedure would be the same. Business with employees would be allowed a poverty-line deduction for each full-time employee as a contributor to the economy.
It is not easy to take an institute as confounding as Uniform Tax Code and reduce it to a mere one-page submission every year but there it is. A simple, direct income tax without all the fancy bells and whistles we have today.
The beauty of this tax is it applies to every person, every entity. Everybody is insured they are protected against the poverty-line so we could do away with things like housing allowances and food stamps since those are the built-in deduction.
We wouldn’t have to worry about energy credits because shouldn’t everyone’s average energy use be accounted for in the poverty line? Child care expenses and personal exemptions would disappear since those are included in the poverty line.
It would make life so much simpler and there would actually be a positive use for all those government bureaucrats to show Congress not why they should be getting more tax dollars but demonstrate their effectiveness by determining how much expense-related importance their agency has to that all-important poverty line.
The benefit goes far beyond a simpler tax form. The government will have to come up with a realistic poverty line, a realistic tax rate which will apply against every citizen or legal alien working or studying here.
The individuals who can afford more will be taxed more only because their income surpasses the poverty line by more than someone else. In other words their family surpasses the poverty line per person by more than some other family does.
Thus all tax benefit you could get would be on a relationship to the “poverty line”. But the government would have to get real here or face an open revolt. A dependent in today’s world still costs far mare than any benefits you can get from the government for that person.
The government would have to provide realistic figures for average costs of education, food, energy, clothing, housing, medical treatment and transportation before it could get its tax program off the ground. We would still have to leave the amount of the tax rate to officials also.
But don’t expect it to happen. Members of Congress and members of Big Business are too used to the exemptions they are currently getting to change.
So you will have to continue hiring someone to do your taxes and take the expense deduction for the act.
Simple may be better but then the average politician couldn’t pass out political favors (tax deductions) like candy. Whatever would they do to show their “concern” for a constituent then?
“I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man.”–Thomas Jefferson