The American tax system is a bureaucratic nightmare, its tangled web of taxes, loopholes, and millions of words resulting in absurd compliance costs. There is an easy, effective solution: a flat tax.
Steve Forbes, editor-in-chief of Forbes, notes in Prager University’s latest video that 46 different tax experts analyzed a hypothetical family’s tax liability, and each one came up with a different result, highlighting the complexity of the tax system’s 10 million words (and counting), seven tax brackets, and over $600 billion in economic costs. Forbes contends that the flat tax is the remedy to this burdensome tax system.
“Fill out a sheet of paper or key in a few numbers on your computer, and you’re done,” Forbes says. “This one change would not only make every citizen’s life easier, it would also transform government, our economy, and our society by ending the complexity that gives bureaucrats and politicians so much power. They have power because they’re the ones who dole out the tax favors.”
Indeed, the tax system has enabled corporations to lobby for tax breaks and loopholes that breed cronyism, and a flat tax that only has one deduction “for each adult and for each child,” as Forbes advocates, would put an end to the symbiotic crony capitalism that the government and corporations engage in.
“Everyone would pay less – not only in taxes, but also in compliance,” Forbes says. “Investment and job creation would skyrocket. We’d experience a recovery that would grow the tax base and – irony of ironies – ultimately generate more revenue for government.”
Forbes believes in a 17 percent rate for individuals and corporations, and a rate of zero percent for those who make less than $52,800. This won’t stop the left from engaging in their usual class warfare tripe, but Forbes notes that the data shows that lower taxes actually result in the rich paying more in taxes.
“Prior to the passage of the tax cuts that President Ronald Reagan pushed through Congress in 1981, the top one percent of American earners accounted for nearly 18 percent of federal personal income tax revenue,” Forbes says. “By 1988, that same group accounted for nearly 28 percent, an increase of 10 percentage points in only 7 years.”
Forbes concludes the video by calling “for another tax revolution.”
“By eliminating loopholes and requiring everyone to pay their fair share, the flat tax offers a model of tax fairness,” Forbes says. “More than 40 countries and jurisdictions have enacted the flat tax. When all the facts are considered, the real question is not whether America should implement this vital reform, but what are we waiting for?”