[quote=Hobie]As discussed later in the thread, a flat tax allows for only one lever and a much more visable one. This is the control I’m referring to and its positive effect. It would also save companies lots of money in the tax accounting and save taxpayers the cost of a large IRS. Sure there are some problems that need to be addressed, for example how to incentivise people and companies to donate to charity. It would also bring the underground cash economy to the surface and make for easy collection of the tax. Companies spend lots of unproductive time trying to outguess the government’s next tax move. A straight tax would reduce this considerably enabling them to make more accurate long term plans for growth, which I believe will make them more productive. As the the regressiveness of it, I like to look at the total amount of tax paid by a firm or individual. Not the percentage. Treats everyone fairly and those with more, spend more.
So we can agree the use of tax code in this manner is a tool of control?[/quote]
No. Wrong on just about every item. Nothing there we can agree on.
A flat tax changes multiple rates to a single rate. It does nothing to simplify calculation of taxable income. It does not allow for just one lever. (whatever that means.) It wouldn’t save companies a single dollar in tax accounting, unless you’re proposing a flat tax on gross income. And with all due respect, that wouldn’t be a bad idea, it would be a moronic one. Entire essential industries would cease to exist. No way a grocery store could survive. Or a gas station. Costco? They’re out of business.
I don’t see how it would bring a single dollar of underground economy above ground. Or make collection any easier. It wouldn’t help tax planning. If we change to a flat tax system (which isn’t going to happen anyway), we could just as easily move back to a progressive system. (And as an aside, if you think big companies have problems doing long term tax planning, you’re wrong. It’s not a problem for small companies either, they just don’t do it near as often.)
Flat tax is not a simple solution. It is a simple idea put forward by simpletons. People who have no understanding of the current tax code. It is not a serious idea. Unless a new tax system addresses the complexity of how businesses operate. Any that suggests a flat tax on gross business income doesn’t do that. It’s not even worth talking about.
