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November 19th, 2017

Insight

It's Time for the Flat Tax

Bernard Goldberg

By Bernard Goldberg

Published Feb. 3, 2015

Here's a bulletin: President Obama wants wealthy Americans to pay higher taxes. I know: What else is new? The proposed increase is part of the president's budget that he sends to Congress today, a budget that at least in part tries to deal with income inequality, by taking more from the so-called rich and giving their money to everyone else. But income redistribution is something liberals like to do, not something Republicans who now control both Houses of Congress get giddy about. So, can you say Dead On Arrival?

It would be helpful if Mr. Obama acknowledged that one reason for the income gap between the extremes — the rich and the poor — is that there are too many fatherless families among poor Americans. Young women having babies with no husband around is a road to poverty. But this isn't something the president — or liberals in general — like talking about.

Liberals prefer telling the rich to pay their "fair share." But they won't tell the poor to stop doing things that make them poor.

Not all poor people are irresponsible, of course. And Americans aren't against helping them. It's the clueless we're tired of.

Then there's the gap between the rich and the middle class whose incomes have been stagnant for a long time now.

Mr. Obama, of course, never takes responsibility for any of that stagnation even though middle class incomes have dropped during his 6 years in office. It never occurs to him that his tax and spend policies coupled with oppressive regulations on business might have something to do with stagnation and income inequality.

If he could get away with it, I'm guessing the president would simply pass an executive order flat out confiscating money from the rich and sending checks to the middle class — not so much because it's good economics but because it's a good way to secure votes for the next Democrat who runs for president — and every other office.

Here's another way to help the middle class and get the stagnant economy finally going: Push for a flat tax.

I've written about this before saying the flat tax was an idea whose time has come. Lower the tax rate — 17 percent sounds good, but I'd leave the actual number to the experts. Make the first $40,000 — again I'd leave that number to the people who crunch numbers — tax-exempt. That way, the middle class doesn't get hurt.

My flat tax plan would not be revenue neutral. We spend too much as is. So, flat tax revenue should be less than what's currently collected, forcing everyone in Washington to spend less. Experts believe — yes, mainly right of center experts — that the lower tax rates would kick start the economy. They point to countries in Eastern Europe that instituted the flat tax and saw their economies take off. (In fairness, some of that may be because those countries no longer were part of the old Soviet Union. Kicking communism all by itself encourages investment and raises the standard of living.)

Liberal Democrats, of course, will never go for a flat tax. The idea is way to0 radical for them. Someone earning $10 million a year, they figure, shouldn't pay the same rate as someone making $50,000 a year — even though 17 percent of $10 million is a lot more than 17% of $50,000 and that's before the $40,000 tax exemption.

Remember, back in 2008 when candidate Obama was asked if he would raise the capital gains tax even if it brought in less tax revenue? He said yes, he would. Why? "For purposes of fairness." Rule of thumb: the liberal view of "fairness" will trump sound economics every time.

But Republicans ought to write up a flat tax bill anyway, which would sail through the House and might even garner enough Democratic support to pass the Senate. Then, let the president veto it. Let him look like the obstructionist for a change.

In 1913, when the federal income tax became the law of the land, the tax code was 400 pages long. In 2008, the year before Mr. Obama became president, it was 67,506 pages long. In 2013 — 100 years after the first income tax was collected — the federal tax code was 73,954 pages long.

Here's an idea: The GOP candidate for president in 2016 should say enough already. He should run on a simple flat tax platform. Let Hillary defend the current mess — all 73,954 pages of it.

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