"What is wrong with a 15% flat tax that everyone pays and with that you get rid of the IRS.........."
That is too involved a question for me to give you a complete answer in this forum. I will, however, try to give you a brief answer.
First of all, I assume that you are referring to the Armey-Forbes-Shelby Flat INCOME tax which has been proposed for some time. The fact that it is still an income tax means that you still tax people on what they contribute to the economy, rather than on what they take out (consume) from the economy. In addition, you perpetuate the notion that you can define the ever elusive term "taxable income" in a manner that is clear and fair. This flies in the face of roughly 90 years of recent US history. The bulk of the complexity in the tax code is NOT, I repeat NOT due to figuring out what rate to use. The complexity comes from the deductions and the Flat Tax makes minimal reductions there.
The Flat Tax would NOT get rid of the IRS or make a significant dent in the hundreds of billions of $$$ spent annually on compliance costs.
The Flat Tax, because it retains the corporate income tax and payroll taxes, also perpetuates a system in which we handicap our producers and make it difficult for them to compete, not only in foreign markets, but even in our own market. This is one of the major reasons that we have such an influx of imports into our country and an economy that can drive up the Dow but is sorely lacking in job creation.
How's that for a start? Here's a more thorough answer.
http://www.geocities.com/cmcofer/confess.html This article was written by Dick Armey's former Chief of Staff who, like Mr. Armey is also a trained economist, and who is well versed in both proposals. His conclusion is that the Fair and Flat taxes are similar in many respects, but in every case where there is a difference, the FairTax comes out on top.
His conclusion is that the Fair and Flat taxes are similar in many respects, but in every case where there is a difference, the FairTax comes out on top.
And why Senator Shelby (The Senate's promoter of the Flat Tax) favors the national retail sales tax over the flat tax as well.
'We know it's not perfect' (Shelby on the Stump in Alabama)
- His preference for a sales tax is even greater than the flat tax he has promoted for years