My Turn: Is it time for a flat-tax revolution?
Now that the dreaded tax time for Americans has come and gone for another year, perhaps it’s time to reflect on just how ludicrous our current Federal Income Tax situation has become.
Anyone who’s grappled with this hydra-headed tax monster knows how difficult the experience can be. Estimates vary on how much time the average taxpayer spends on his or her annual tax returns. Common sense tells us it is way too much.
However, one thing is clear. Most of us don’t have a clue about how to navigate the murky, bureaucratic waters of the Internal Revenue Service. The instructions provided by the IRS are mind-numbing in their turgid prose and slippery numbers, so much so that even the IRS isn’t always sure what they really meant to say.
All this is a real boom for professional tax preparation organizations, but a real bust for taxpayers, who must foot the bill for the privilege of parting with their hard-earned money.
Two hundred-thirty years ago, we began the American Revolutionary War, partly motivated by the famous cry of “No taxation without representation!” Actually, the tax burden on most Americans then was light, very light, compared to what we pay today. Now we suffer what I call “Taxation without comprehension.”
Ironically, most recent attempts to simplify our Federal Income Tax system have failed miserably. For example, Congress passed a comprehensive tax simplification bill in 1986. It was signed into law by President Reagan, and hopes were high. Unfortunately, before the ink was barely dry, legions of tax lawyers, accountants, and others with vested interests in de-simplifying our taxes made successful assaults on Capitol Hill to reverse simplicity and re-instate complexity.
Maybe it’s time to re-visit the radical idea of a flat tax. Remember former presidential contender Steve Forbes? His proposals for some version of a flat tax were widely derided, not on their merits, but on appeals to our emotions. Opponents argued such a tax would be unfair, which begs the question: What’s fair about the current system?
Those who can afford it hire their experts to find every loophole, no matter how ridiculous it may be, to avoid paying their taxes, while average taxpayers plod along, paying more than their fair share.
A flat tax, properly implemented, would be ultimately fairer to the vast majority of taxpayers than the current system. For example, a person making $100,000 a year, taxed at a flat rate of, say, 15 percent, would owe Uncle Sam $15,000.
Someone earning less would pay less, though at the same flat rate. To those who say higher-income earners should pay more than those earning less, I agree. And they would, under a flat tax. Math is not my forte, but even I know 15 percent of $100,000 is twice the amount of 15 percent of $50,000.
In addition to the potential for simplicity and fairness, a flat tax could made so transparent that average taxpayers could complete their returns without paying someone else to figure out what they owe. The returns could be as simple as a post-card or the electronic equivalent.
For those who think simplicity, fairness and transparency are bad for taxpayers, no alternative to the present tax system will do. However, for those of us who believe there must be a better way, let the debate continue.
Clearly, a flat tax is no panacea for the vexing challenge of finding a simple, fair and transparent means of collecting federal income taxes. However, it is certainly worth considering.
Several other countries have adopted some form of a flat tax, and it seems to be working for them. Maybe it’s time for a “flat tax revolution” in this country, too.
Thomas B. Vaughn is a professor at Motlow College and co-host of radio show “Viewpoints” which airs on WCPI.