If we address the tax code – we need to look at how deductions are used. It’s kind of like tea-partiers wanting government to keep their hands off their SS and Medicare. If you want a flat tax – there goes your home interest deduction, there goes your child as a deduction, there goes your 15% rate on long term cap gains, there goes your cap gain exclusion when you sell your house.
I’m not saying the current system is good – it’s not – it’s seriously eff’d up. But a lot of people don’t realize they could be a worse off with a flat tax. I know I personally benefit from the home interest rate deduction, the children deductions, the long term cap gains, tax deferal through 401ks, etc. All that goes away with a flat tax.
The good side of the flat tax – corporations, presumably, would also have to pay a flat tax – so no more creative book keeping, writing off inventory, moving assets around to hide profits offshore.
