[Dutchboy88]

"Recovering what you paid for an asset — also called its “basis” — is not income. Profit (sales price minus basis) — from sale of a home, a share of stock, whatever — is taxed at the flat rate. Just as it is now, by the way."

Wait a minute...you just complicated your "flat" tax...no deductions. 6 months and we have what we have now. Seems like changes aren't necessary.

[Nervous Tick]

Basis isn’t a “deduction”. Basis is just what the word means: — the “base” value of an income-producing asset, upon which profit (income) or loss is based.

Put so that perhaps you can understand it: if you cash in a bank CD, you don’t pay flat tax on the whole amount of the CD, because you yourself GAVE most that to the bank on deposit. You pay tax on the INCOME from your “base value” (principle), which you and the bank call “interest”.