A FLAT TAX!
In light of recent Obama nominations to his cabinet, it has become obvious that our present tax system is overwhelming to our government leaders. I think now would be a good time for change. Below are some considerations as put together by the Heritage Foundation:
These major features of a flat tax are:
A Single Flat Rate. All flat tax proposals have a single rate, usually less than 20 percent. The low, flat rate solves the problem of high marginal tax rates by reducing penalties against productive behavior, such as work, risk taking, and entrepreneurship.
Elimination of Special Preferences. Flat tax proposals would eliminate provisions of the tax code that bestow preferential tax treatment on certain behaviors and activities. Getting rid of deductions, credits, exemptions, and other loopholes also helps solve the problem of complexity, allowing taxpayers to file their tax returns on a postcard-sized form.
No Double Taxation of Saving and Investment. Flat tax proposals would eliminate the tax code’s bias against capital formation by ending the double taxation of income that is saved and invested. This means no death tax, no capital gains tax, no double taxation of saving, and no double tax on dividends. By taxing income only one time, a flat tax is easier to enforce and more conducive to job creation and capital formation.
Territorial Taxation. Flat tax proposals are based on the commonsense notion of “territorial taxation,” meaning that governments should tax only income that is earned inside national borders. By getting rid of “worldwide taxation,” a flat tax enables U.S. taxpayers and companies to compete on a level playing field around the world.
Family-Friendly. All flat tax proposals have one “loophole.” Households receive a generous exemp tion based on family size. For instance, a family of four would not begin to pay tax until its annual income reached more than $30,000.
Consumption-Based. A tax code that does not discriminate against saving and investment is considered a consumption-based tax system, regard less of whether taxes are deducted from the paycheck or collected at the cash register. In this respect, a flat tax is a type of consumption tax. The difference between a flat tax and a national sales tax is where the tax is collected. A flat tax is levied on income—but only once and at one low rate—as it is earned. A sales tax is levied on income—but only once and at one low rate—as it is spent.