I’ve had some feedback on my post on taxes. The response — “so what would you do?” Being a somewhat simple soul, I look for simple but equitable solutions. From what I’ve heard, a “flat tax” might be an option. According to those who have studied the plan, a flat tax if implemented would actually result in a huge boost in revenue. It works simply: Everyone pays 15% (or whatever percentage you choose) of their income in tax. Deductions are allowed up to a certain amount for charities and home mortgage interest. There could be a graduated/sliding scale up to a certain amount for those lower income people so their flat tax percentage is less (or even zero). The poor would thus be vested in the system as well as high-income people. Yet the poor and low income people would still reap benefit. Everyone would pay their tax but those below the threshold would fill out their tax form to get the money back. This encourages all members of society to file tax returns (which is not the case now).
You could then have a V.A.T. (value added tax – or sales tax) of say 10% (again — whatever number you want). Corporate executives who buy a car or drug dealers who buy a yacht with cash – still pay a VAT. All sales result in a VAT. This recovers tax money that might otherwise not be recouped. Everyone pays the VAT but again, you could make provision to repatriate specific amounts to those who earn below a certain threshold. Thus you have means testing for tax benefit (which certain people like) yet parity and simplicity.
According to pundits who have studied this metric, a flat tax would result in revenues the likes of which this country has never known. The downside is that it would put hordes of lawyers, accountants and government workers out of work. On second thought . . . . .