IS IT TIME FOR A SIMPLE FLAT TAX

Is it time for a simple flat tax. It’s time for a simplified personal income tax system–a flat personal income tax. And, it’s time to end class warfare revolving around it. Section 199A deduction is computed ? ON the same topic, don’t be naive to think your tax preparer knows all of the steps necessary to qualify for that type of a business deduction. Every time the topic of tax simplification comes up, they oppose it—oppose simplification of rules that so many of them don’t even understand. That’s because when it comes to tax breaks, special interests come into play, and that then brings in campaign contributions and re-election and politics. Then the whole idea seems to be kicked down the road to the next Congress or President, but then it repeats over and over again. A good example are real estate agents. If a flat tax is adopted, there’s no mortgage deduction. And, if there’s no mortgage deduction, they fear that no one will ever want to buy a home. So they oppose it. Is it time for a simple flat tax.

Then you have those will say a flat tax system will allow some to pay nothing, which is a moral hazard. But low income employed individuals do pay something–they still pay 7.65% in payroll taxes. So they are paying something. If low income retirees are paying no income tax, so be it. And, there are the elected leaders. They will oppose it. As one illustrious U.S. Senator purportedly said, “If we solved all of the problems, why would they need us ?”  According to statistics published by the Tax Foundation, ranking personal income tax returns by income, the bottom 50% accounts for only 3.1% of income taxes paid. These returns reflect incomes of roughly $42,000 or less. Is all of the political angst worth the measly 3.1% in tax revenue ? All the venom that is injected into our national conversation ? Aren’t there bigger issues to tackle ?