"BTW, I would prefer a flat tax which, as is evident by the poll I posted previously, has significant support."
The concept of a flat tax has considerable support. If you measure the support of any of the various flat tax proposals, they are miniscule. Apparently, there is a major problem reducing the concept to a workable level of specificity. After all, it isn't like the flat tax is a new arrival on the tax reform scene, is it?
Apparently, there is a major problem reducing the concept to a workable level of specificity.
Several problems from what I have discerned in comments of businesses, individuals and politicians concerning why the flat tax looses its luster when it comes down to nuts and bolts implementation.
1) For all intents and purposes, despite the attempt, to place it in a psuedo consumption tax catagory by not taxing income from savings or investment. The flat tax implementations still tax principal from non-investment sources going into savings or aquiring investment securites.
2)The flat tax, still requires complex rules and regulations to distinguish return of capital from taxable income. A primary bugaboo of the income tax causing the more significant part of the complexity of tax income.
3) The flat tax is not acceptable as a boarder adjustable tax. There is no sufficient mechanism of rebating taxes paid under it that are embedded into export goods and services to the businesses and corporations paying income and payroll taxes under a flat tax system.
4) Regardless of the hype implying otherwise, IRS is still there in all its glory collecting and charged with verifying the truthfulness of reporting of income for tax purposes and that income is even being reported. Bottomline that is the factor that never goes away in any income based tax laid on the doorstep of individual or business to report and assess ones own tax liability.
5) All actual flat tax proposals before congress have removed large sectors of the electorate from direct participation in the flat tax system fostering a large constituency supporting ever growing government hand higher tax burdens over time as a consequence.
6) No flat tax proposal submitted to congress has ever attempted to do anything concerning the SS/Medicare payroll tax levied on both business and individual coincident with the flat tax its self.
No flat tax legislation proposed has even come close to the concepts that it has been promoted to the public under, and none have even begun to address the need to remove tax burdens from our export goods and services placing the U.S. at severe disadvantage in foreign trade with nations that have border adjustable or nil taxation in products placed into international commerce.