“The only deductions that should be allowable are legitimate expenses of operating a business, and the basic cost of feeding and clothing each individual.”
And who’ll decide what are “legitimate expenses” and “basic cost”? Back to loopholes. Some have suggested that the only deductions should be mortgage interest and charitable contributions - period.
Someone who IS an expert in economics (although you may not like him either) is Stephen Moore of the WSJ, and he likes HC’s 999 plan. He was discussing it earlier today. It’s designed on throwing out the tax code, replaces payroll tax, corporate and personal tax, capital gains tax, estate (”death”) tax, encourages repatriation of funds without penalty, eliminates loopholes, is an alternative, minimum tax that’s supposed to save around $430 billion in filing and compliance costs.
I think the biggest key is not to add it on before doing away with current federal income tax code, but HC knows that and has talked about it before. He also thinks of his plan as an interim until we can ultimately end up with a flat tax.
Legitimate costs of doing business are no mystery. They amount to everything that is not in some way a gift.
The loop holes are almost always imaginary, amounting to political rhetoric, and nothing more. If the costs of doing business are not deductible, prices must rise to compensate. This is why the loophole rhetoric is counter productive.
The “fair tax” scammers don’t want these facts debated, because their goal matches Obama’s: Shut down small business. Anything that resembles a sales tax is a poison pill to jobs and the availability of services, and quality products, and leads to defacto serfdom for all.