The Flat Tax Versus the Flat, Flat Tax

Although I am not a fan of the flat tax, this short video is well worth viewing. The look on President Obama’s face is priceless as pediatric neurosurgeon Benjamin Carson criticizes the punitive thrust of progressive income taxation at the National Prayer Breakfast.

Of course the so-called “flat tax” is not really a flat tax at all because it extracts a much higher dollar amount from those earning higher incomes than from those who earn low incomes. For example, if everyone is taxed at the same flat rate of, say, 10 percent, then the individual earning $1 million per year must pay taxes of $100,000 whereas the individual earning an annual income of $50,000 pays only $5,000. The former is thus forced to pay a price twenty times higher than the latter has to pay for the same rotten government services. How is this not a punitive tax?

This phony flat tax contrasts sharply with the situation on the market where all individuals, regardless of income, pay exactly the same price for any given good like bread, tablet computers, Cadillacs, movie tickets and all of the other privately produced goods and services they buy. Now imagine if everyone were forced to pay a price in proportion to his income for everything he purchased on the market? A higher money income would no longer mean command over more goods and services. Hence, no one would have any incentive to earn a higher income by excelling at producing things consumers desired, and, as a result, productivity and the economy would come crashing down. If people truly wanted to avoid the discriminatory and punitive aspects of taxation then they would favor a “flat, flat” tax, that is an old-fashioned “capitation” or “head” tax in which everyone paid the exact same dollar amount to the government. Not only would this not penalize more productive people but, much more important, it would have to be very, very low in order to ensure that even the lowest-income people are able to afford it. I think 200 bucks a person per year sounds about right. To the bleeding hearts out there worried about the poor, I am more than willing to entertain proposals of 100 bucks, or better yet, zero.

Comments

  1. It has long been recognized that the most efficient form of taxation is a tax on Economic Rents. Unlike other taxes that add to price, an economic rent taxes not only doesn’t add to price it helps keep them down & in line with production costs.

    If you abolish taxation, money & CB’s, you will not only dismantle the welfare state, but United States.

  2. Readers of this Blog must understand why we have an Income Tax. !st. of all, the Income Tax only accounts for about 35% of all Federal revenues. The other almost 2/3 of Revenue is made up of Corporate Taxes,Tariffs,Fees,Fuel Taxes,Value Added Taxes,Payroll Taxes(mostly Social Security and Medicare Taxes)but also other taxes,Telephone Taxes,Luxury Taxes plus about 200 other taxes directly and indirectly. So if you abolished the Income Tax you could cut Federal Revenue by about a third. Of course much of Federal Revenue is made up of Borrowing and or Money printing. This is the main reason that we have an Income Tax. In other words the money of America used to be backed 100% by Gold and or Silver. Today we have Paper Bonds created out of thin air backing paper money or Computer entries created out of thin air buying real goods and services in the Market. Real goods and services can only be created from raw materials,labor,brain power and production. With paper money all you need is a printing press and legal tender laws that give the state a monopoly on money. Of course all of this Bond and Money printing is extremely inflationary. So in order to control inflation and in order to pay the interest on the accrued debt an Income Tax was created. If you study history and go back 100 years when the Income Tax was enacted,at the same time,the Federal Reserve System was created. In the end, the Federal Reserve is a private banking cartel owned by extremely rich and powerful men. It is neither Federal nor has any reserves. If you do away with the Income Tax you would have to abolish the Federal Reserve Cartel also. So,in essence,the IRS and the Income Tax are nothing but collection agencies for the Interest on the National Debt that is owed to,mostly,a consortium of private bankers. When the politicians went into debt to fund Federal Spending they used as collateral the paychecks of current and future American workers. In fact its not the American Government that is responsible for the debts of these politicians but the American people,including unborn generations. Sad to say that what used to be one of the freest nations on earth is now a nation of Debt Serfs. So now you see that changing the method of taxation won’t change anything fiscally for America. The only thing that will save the day is to abolish the Income Tax,Central Banking,Fiat Money thus forcing the fiscal dismantlement of the American Welfare/Warfare State.

  3. I think would be an interesting way to do it:

    Make it say 10% of your income, capped at… whatever $10,000 max.

    Then on your tax return every year you get to allocate to which departments your tax dollars are given. Put some free-market into the government.

    It would be very interesting to see which programs fall by the wayside.

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