Would a Flat Tax Be More Fair? | 5 Minute Video
What would happen if there was just one tax rate for most Americans? Would that be fair? Could it even work? Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, explains.
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Script:
The American Revolution started as a tax revolt – over a single tax on tea! Now look at us. It seems like everything we do is taxed.
The system behind these taxes is a bureaucratic monstrosity; a dead weight on the economy. And it erodes our trust in the government that’s taxing us. If you have enough lawyers, lobbyists, and loopholes at your disposal maybe you can game the system. That’s fine for big corporations and wealthy individuals, but what about the small business owner or the middle class taxpayer? He just has to shut up and pay up. Nothing better illustrates the disaster that our tax system has become than the mother of all taxes: the federal income tax code. This tax alone, with all its attendant rulings and interpretations, is estimated to be about 10 million words – and rising!
Several years ago, Money magazine took a hypothetical family’s finances and gave the numbers to 46 tax preparers. Forty-six different estimates came back. In some cases those differences ran into the thousands of dollars of what the family owed. This from experts who are considered to be the best in the business. But the taxes themselves are only part of the cost of this toxic code. There’s also the cost of compliance – the time, money and effort it takes Americans to prepare their taxes.
A George Mason University study puts the annual cost of compliance as high as $378 billion and the total annual economic cost (including work hours) at more than $600 billion. Again, these are annual costs – as in every year! That’s a lot of money that could be used in more productive ways – creating new products, new services, new medical devices, new cures for diseases.
Clearly, the time has come to drive a stake through the heart of this tax monster. So, what should be done? Like most things, the best solution is the most simple: A single flat tax with no deductions, except for a deduction for each adult and for each child. Fill out a sheet of paper or key in a few numbers on your computer, and you’re done. This one change would not only make every citizen’s life easier, it would also transform government, our economy, and our society by ending the complexity that gives bureaucrats and politicians so much power. They have power because they’re the ones who dole out the tax favors.
It wasn’t always this way. There was a time when corporations primarily lobbied Washington to keep government out of their businesses. That has changed. In the words of The Atlantic, “The evolution of business lobbying from a sparse reactive force into a ubiquitous and increasingly proactive one is among the most important transformations in American politics over the last 40 years.”
This favor-seeking is centered on getting special treatment and tax breaks. A flat tax will help us begin to scale back that special interest-loving, crony-capitalist big government that we all complain about. Everyone would pay less – not only in taxes, but also in compliance. Investment and job creation would skyrocket. We’d experience a recovery that would grow the tax base and – irony of ironies – ultimately generate more revenue for government. I go into this in much greater detail in my book, Reviving America, but here, in essence, is how it works.
For the complete script, visit https://www.prageru.com/videos/case-flat-tax
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A flat tax does not abolish the IRS nor the 16th amendment. It’s still you under the thumb of the government. Your income shouldn’t be any of the governments business. The FAIRTAX does away with the IRS. You keep ALL of your income and you pay tax only when you buy something new. EVERYONE PAYS. But the poor get a tax refund up to the amount of poverty level spending. The rich pay more because they spend more. MUCH FAIRER. AND SIMPLER.
A flat tax would work great. Everyone who gets an income is taxed the same. No matter how you earn it, you pay the same percentage.
makes too much sense, the uniparty will never go for it.
Steve, a flat tax would be definitely a huge improvement over our citizen raping system we have now. The “Fair Tax” proposal is even better than any flat tax. However, any tax system that takes away the power of congress is doooomed to fail. DOA. Most people are so ignorant about taxes they continue to vote in idiot politicians who continue to lie about taxes. Our system needs to be so blatantly obvious to everyone how much taxes they are being hit up for every day.
Same flat tax for all 15%….for everyone.
People keep talking about paying their “fair share”. Why should the middle class and lower class bear more tax burden when things are already as bad as they are? Not to mention a true flat tax system would eliminate many deductions that the aforementioned middle class utilize quite frequently. The rich would benefit far more than anyone else.
Remember too that the rich can play with their income via dividends, interests, etc. The average individual can’t play that game.
The flat tax sounds good on the face of it, but I’m not buying it. And for those asking why Trump won’t support it, it’s pretty simple. Most people (rightly or wrongly) think they are paying too many taxes as it is. A flat tax is going to increase their tax burden in all likelihood
If we actually saw beneficial and responsible results from the taxes we pay in, maybe it wouldn't hurt as bad. However…..
I like this very much. I think it solves many of the complaints from both sides. EXCEPT everyone needs to contribute to society. Everyone should have a stake in our country and be paying taxes. They will already be paying far less than most people because it's a percentage.
This is one of my favorite videos hands down. I loathe taxes every year and they make my life so much more difficult than it needs to be.
I think flat tax it's fair.
10% of $10 billion income is $1 billion
10% of $70k income is $7k
Everyone pays their faur share
I prefer a 14% flat rate. The poor don't pay their fair share.
I have another idea the government sends you the bill you bay and there's no need to do any maths or extra paper work exept if you want to deduct something.
Hm, no, that’s not the main method of fixing it. The issue is closing gaps and simplicity, while shifting most of the weight to the rich. The poor lack the money to exploit loopholes, so let’s close the loopholes in general and shift the taxation to directly target the rich people. A flat tax is merely a static tax to make the rich have to pay less, the reduction of all other taxes is just an addon of deletion, not what a flat tax actually is. The IRS was previously gutted already, and it’s time that taxes are filed by the government to increase simplicity, something even Reagan supported. Wealth taxes and windfall profit taxes must be implemented, along with enforcing taxes on property and decreasing incentives for billionaires to pull out massive loans from banks to achieve artificial wealth that they will never pay for.
I’m all for a flat tax—after all other taxes, hidden taxes and fees have been eliminated. Otherwise it’s a shell game.
So taxation would begin at 52,800 for a family of four, would that include anyone making under 52,800 even a single individual? Also at that point someone making 53,000 would get the 17% rate? So someone would essentially need to make around 61,800 just to take home the same amount as someone that makes 52,800? You would need a pay jump from about 25 an hour to almost 30 to start seeing benefits from the pay increase.
The 1913 tax act wasnt all bad of course.
But from the begining it was designed to kill large business.
A flat income tax percent for everyone. At all levels. And then done.
Ive said it for years
Then take some teeth from nafta
Or how about abolishing the income tax entirely, sales tax already taxes the rich enough
As long as there’s income and property tax, citizens aren’t truly free nor do they own their property outright. We shouldn’t be required to pay the government a fee to work and live, nor should we have to pay a government fee to own property. Consumption tax and tariffs should be the only means the government is funded. That will force the federal government to shrink.
If billionaires loved this country, they would donate to pay down the national debt
If there were a flat tax then ther would need to be a capital fains tax and inhetiance should apply to flat tax. Otherwise the loop holes are baked into the system still. And there should be a base income that is not taxed at all, such as the first 20k. Anyone making under 20k isnt going to earn enogh to surrender 15 or 20 percent to the government.
There can never be a flat tax unless they change the apportionment provisions of the Constitution. Steve Forbes knew that very well but got away with it for political purposes.
Why not do away with federal income tax- note, I said do away with, NOT augment with- and replace it with a federal SALES tax, on all NEW products, except food!
Those evil rich people would pay far more tax dollars than non rich people because they would by more new products!
Anyone could avoid paying the tax by buying second hand items!
NO deductions whatsoever! None!
Nobody gets a dime of other peoples money either- the only money taken in to ANY consideration is your own money!
Maybe, it's just the video, but part of the reason that tax code is complicated is because income is complicated. It sounds easy to say tax all income at 17% but figuring out income can be tricky. The tax code is definitely way too complicated now and could be simplified but I don't think that it can be reduced to something as simple as suggested here.
It's not flat if everyone doesn't pay. Everyone must pay.
Or we could just have return free filing🤷♂️
No one with real power will ever want to get rid of their loopholes
10% of $20,000 is $2,000
10% of $800 billion $80 billion, seems fair to me
If representation is a prerequisite for taxation, then only voters should be taxed.
I like the "fair tax" as described by Mike Huckabee. Instead of an income tax, you pay taxes on goods and services. The more you buy, the more you pay. Who pays the least? People with low incomes.
Yeah flat tax sounds real good on paper but you know what sounds better no tax no government
I agree with like 90 percent of what you said.
Yeah ! Flat tax everyone . I agree with Nazi Steve Forbes . Elvis Presley was paying a 90% tax when he was in the United States Army . Make the rich pay their share . By the way , the wealthy made our tax code complicated because they get so many tax breaks .
When you look at your paystub, especially if you are middle class or blue collar and working 40 hours or more, it can be depressing seeing how much money in taxes is taken out.
A proportional tax ignores that everything else in our economy is regressive. The rich should pay a higher percentage of their income then the middle class because they can afford that
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Clearly the answer is stop voting liberal or democrat and start voting republicans
Isn’t a consumption tax even better ? Restart our blue collar industries Create high quality goods here. American made is generally crap. Gotta reverse that trend
I've always loved the idea of a flat tax only problem here is that the Democrats will never buy it they use taxes as a way of control to control us
I have been supporting a flat tax for more than 10 years ago now.
'Taxing The Rich' mentality only benefiting the ultra-rich corporatist who can afford tons of lawyers, accountants and lobbyists to protect their business from taxation monster. In other hands, the small business that provide goods and services to the customer and appear as a challenger to big business, can't survive the 'Taxing The Rich' laws and they will easily got crushed by those exploitative laws
The FairTax has been proposed in congress year after year. Image no tax filings – April 15th would be another lovely spring day – – and totally eliminate the IRS.