> “Throw away the IRS Code and replace it with a flat 17% tax on income...no deductions, same rate for corporations and individuals. Yeah, I know it won’t happen, but it would be a hell of a lot better than the crap we have now.”
The original income tax of 1913 had a code that was 14 pages long and was flat with 7% on wealthy persons who made up less that 2% of the population. The rest were subject to a flat 1% on net disposable income. Tax filing was never required if no taxes were due. The result was 98% of the population never paid income taxes, never had to file and never thought about the income tax. There were no deductions as well.
That’s how the income tax was sold to the American people, as a tax on the rich and only 1% on everyone else if they had anything left over. Real slick way to worm in a monster among the public.
A few years back, the father of Bill Gates III Founder of Microsoft ran a campaign initiative to establish a state income tax in the State of Washington. Guess what the rate was? 1%. Sneaky, eh? His initiative failed. Beware of the 1% con artists.
How many flat taxes have been passed in American history? The first was a 1% flat tax no deductions in 1861 under Abraham Lincoln. Within a few years it started to grow and become graduated with higher rates for higher tax brackets. It got shot down as unconstitutional by the Supreme Court in the late 1860s.
Then a flat tax came back by legislation in Congress in the 1870s and it died later too. There was a 51 year history of flat tax no deduction ideas and laws from 1861 to 1913 when the 16th Amendment grew from a game of chicken between republicans and democrats. It wasn’t supposed to happen but both parties were playing a ‘I double dog dare you’ game.
So do you think you are the first person to think of a simple flat tax no deductions idea? No, you’re just another in a long line of such people.
And why doesn’t it work? Why don’t flat tax ideas and passed laws work out?
It’s because of the 16th Amendment. This amendment provides a license to Congress to do whatever they want in the arena of taxation.
Pass a flat tax no-deduction law in 2015 and you can be sure the next Congress in 2017 will play and tinker with it because they can. Because the 16th Amendment gives then license to tax income from whatever source.
A FLAT TAX NEVER STAYS FLAT!
I invite you to study up on the FairTax which does not require the 16th Amendment:
http://www.fairtaxplan.org/faq.php
No, I say a flat tax, no exceptions. Once you allow on iota of wiggle room, the flood gates are open and we're right back where we are now.