1) It gets rid of the most insidious form of corruption--the buying and selling of income tax breaks.
2) It saves Americans at least US$350 BILLION per year in compliance costs.
3) It encourages savings and capital formation with no tax consequences, so the savings rate and investment rate will rocket through the roof.
4) Income tax evasion is GONE. The need for the cash-only underground economy and the funneling of what some estimate as high as US$17 TRILLION out of the USA to offshore financial centers goes away, and we could get a gigantic boost in financial system liquidity as these funds are now repatriated back to the American financial under better tax circumstances.
5) We could see several trillion more enter the USA as foreign investors take advantage of investing in a country with no taxes on earning money.
6) #4 and #5 could bring in US$17 to US$20 TRILLION in liquidity to the American financial system. That is essentially the world's largest "private bailout," so big that it could revive all the major distressed banks, AIG and the Big Three automakers and still have more than enough to revive the rest of the US economy.
7) Because of no more taxes on earning money, businesses will now based their economic decisions on what is best for the company, not what is the lowest tax burden. Corporate headquarter and production jobs come flowing back into the USA under better tax circumstances, and all those idled factories and office space will be taken in a matter of months.
8) Homes will be realistically priced based on the value of the property and how the house is built, not what kind of mortgage interest tax deduction you can get.
Sounds good, but we’ll still have government and thus politicians, no? How long do you give it? 20 years?
Well said thanks...