Tax breaks, incentives, higher and lower tax rates. They are all intended to incentivise the populous towards politically favored decisions (or punish people for making money in an politically unfavorable way). The flat tax gives the politicians one lever. Shall we raise taxes today Or shall we lower them? No more of the, should we increase the child tax credit, or the homeowners tax credit,or the capital gains tax, or the estate tax, or the income tax for couple making over/under 250k a year (unadjusted or adjusted for inflation)…one lever.[/quote]
The argument that was made was that the tax code is one of the main tools of power. Nothing in the tax code is relevant in issues like abortion, gay marraige, immigration, right to work, military service. It has limited influence in education, municipal services and many other areas of our lives. It may be a significant tool in economic decisions for many of us.
But the argument that a flat tax would solve that problem (if it is a problem at all) ignores the real complexity in the tax code. The complexity is not the rates, it’s in the definition of income. At the individual level, personal deductions like medical expenses, interest, charitable contributions, personal exemptions. At the business level, which expenses are deductible, when must income be recognized, how are fixed assets depreciated. And that’s just the basics. The tax code is incredibly complex. Switching to a flat tax would only result in a miniscule reduction in that complexity. If there is any truth to the argument that the government wields power through the tax code (and I don’t dispute that there is truth in that, I only dispute that it one of the main tools.), and that reduction of that power is a desirable outcome, a flat tax is not a solution.
