A Boston Tea Party …(Village Idiots)

The flat tax is once again on the hot burner. Steve Forbes has written a new book championing the benefits of abolishing the IRS and installing a flat tax on both personal and business income. The resurgence of tax reform is a welcomed sight. The last time we heard so much discussion on the flat tax was about 8 or so years ago.

I remember explaining the benefits of the flat tax to a management level co-worker around that time. I told him how wonderful it would be if we could do our taxes on a post card. No more need for itemizing deductions or figuring out the earned income credit. He was worried that he would lose his mortgage interest deduction. He further explained the interest deduction was the only reason he purchased a new home. I decided maybe an example would better explain the flat tax benefit. I told him to imagine he made $50,000 and under the current tax system (which includes his home mortgage interest deduction) he had to pay in am additional $1,000 on his return. Now using the flat tax system he still had $50,000 of income. He would lose his mortgage interest deduction but rather than paying in an additional $1,000 he would instead be refunded $2,000. I asked him which system he would prefer. He obviously (sarcasm) answered he would prefer to pay the $1,000 and keep his interest deduction.

It is this type of idiocy the flat tax will have to overcome. There are certain tax breaks, tax loopholes, and tax misconceptions that have been ingrained into the American tax paying brain. It will take as much education on the flat tax as it is taking on Social Security private accounts for people to believe in it. The American public is just not that bright when it comes to reform issues. They are easily scared by those who benefit from the status quo.

It is the status quo that I would target with the idea of tax reform. If I were running against an incumbent of either party I would find out where he/she stands on the issue of tax reform. If the incumbent was still in support of our current tax system I would use that as a weapon. Every politician who favors such a corrupt system has been bought off by special interests. There is no easier way to define a politician as being bought and paid for than to ask if they are in favor of our current tax code. To favor the current system means you agree with income redistribution, tax loopholes, and the government dictating policy through tax breaks. If I were running against such an incumbent I would use the favoring of the current code as a rope and tie it around his/her neck until he/she choked from it. The incumbent would be branded. Branded as an elected official who has been compromised by lobbyists. Steve Forbes will hopefully bring tax reform again to the minds of the American public. Only a village idiot would be against it. Use the above example and find out how many village idiots you have in your neighborhood or office. It may shock you.