Skip to main content

A flat tax is not simpler than a progressive one

Image
By
This man wants a flat tax.
Andrew Sullivan:
And my sympathy for it lies primarily in its simplicity. There is a direct relationship between the complexity of the tax code and corruption. The rich can afford accountants to keep their taxes low - shifting money and valuables around in myriad ways. The people doing that kind of work could actually be doing something productive.
I suppose a piece of paper with "9 percent" on it would be, literally speaking, slightly simpler than some kind of rate schedule—or, better yet, a mathematical formula with smoothly progressive character.  But what Sullivan's talking about is entirely a function of all the tax credits built into the system.  Yglesias:
Our tax code differs from what Perry is proposing in two ways. One is that the definition of taxable income is complicated because you can deduct home mortgage interest, non-reimbursed business expenses, a whole suite of small-bore tax credits, charitable contributions, and various other things. A second is that we have multiple tax brackets, such that a rich guy pays a higher marginal rate than a poor person. It’s changing the first that makes a tax code simpler. There’s nothing complicated about calculating how much you owe in taxes once you’ve calculated your taxable income. The second change just helps rich people pay less taxes.
It could be a one-step process. Income goes in, taxes come out. Making it flatter wouldn't change that at all.
Labels:

Comments

  1. AnonymousOctober 24, 2011 at 9:13 PM

    This message needs to reach more people. The tax code is thousands of pages of how to decide what taxable income is, the rates only hit the result at the end.

    If there was a simple "you pay tax on every dollar that receive", we could still have a progressive tax system likely with lower rates (as more dollars would be taxed). However, it would effectively end the accounting industry which would put hundreds of thousands of people out of work :(

    ReplyDelete

Post a Comment

Popular posts from this blog

The Setswana Grammar Manual

By
One of my few successes during my service here was formatting the Peace Corps South Africa grammar manual for Setswana, written mostly by Art Chambers, an SA16 volunteer.  For anyone wanting to learn Setswana, I reckon it's a pretty good primer, so I present it for free here .  If you think it sucks and you want to make changes, or you'd like to take a look at the raw TeX file, you can find it here .
6 comments
Read more

On Refusing to Vote for Bloomberg

By
Billionaire Mike Bloomberg is attempting to buy the Democratic nomination. With something like $400 million in personal spending so far, that much is clear — and it appears to be working at least somewhat well, as he is nearing second place in national polls. I would guess that he will quickly into diminishing returns, but on the other hand spending on this level is totally unprecedented. At this burn rate he could easily spend more than the entire 2016 presidential election cost both parties before the primary is over. I published a piece today outlining why I would not vote for Bloomberg against Trump (I would vote for Sanders, Warren, Buttigieg, Klobuchar, or Biden), even though I live in a swing state. This got a lot of "vote blue no matter who" people riled up . They scolded me and demanded that I pre-commit to voting for Bloomberg should he win the nomination. The argument as I understand it is to try to make it as likely as possible that whatever Democrat wins t...
4 comments
Read more

Russiagate and the Left, Round II

By
Corey Robin has responded to my article arguing that the left should take the Trump-Russia story more seriously . I do appreciate that he considers me an ally, and I feel the same towards him. However I am not convinced. The points I want to make are somewhat disconnected, so I will just take them one at a time. What should be done? Robin complains that I don't give much attention to the question of how we should respond to Russian electoral espionage. As an initial matter, the question of whether a problem is an important one is logically distinct from what the response should be. There is a sizable vein of skepticism about Russiagate on the left, and the argument of the post was that skepticism was misplaced. Solutions can be worked out later. This point is rather similar to the centrist argument that you can't talk about Medicare for All unless you've got a fully costed-out bill detailing all the necessary taxes and regulation. However, I have advanced some pol...
4 comments
Read more