"Apr 28 2009, 3:29 pm
What Would Taxes Look Like if Arlen Specter Were King?Via Matt Yglesias, I see that soon-to-be Democrat Arlen Specter supports a flat tax. Indeed, he has introduced flat tax legislation since 1995 -- often energetically, and with Grover Norquist at his side. "Flat tax" is a bit of a slippery term -- after all, Rahm Emanuel and Ron Wyden once introduced a flat tax -- but the Specter version isn't especially complicated. It would be a 20% tax on individual and business income, with a few deductions kept around for good measure. What would that look like? Why, it would look like a little something like this:
I like the progressive income tax, so I find the flat tax unappealing for moral reasons. But I also find it slightly bizarre that Specter believes the main recommendation for this tax is that it will "dramatically simplify the payment of taxes." Sure, the tax code is complicated and should be made simpler. But that's an ancillary concern. The point of the tax code is to raise revenue efficiently and pursue a variety of desirable social goals (which you can bundle under the heading of fairness). Making sure taxpayers can mail a postcard to the IRS makes a triviality into a fetish."
"But that's an ancillary concern."
Hardly. The main point would be to rule out the complexity and ambiguity that allows the very wealthy to avoid paying their fair share. It would make evasion harder, and be much cheaper for the individual and government.
"pursue a variety of desirable social goals (which you can bundle under the heading of fairness)"
If you earn a million dollars, you pay $200,000. If you earn $50,000, you pay $10,000. Does that qualify as fair?
"raise revenue efficiently"
You believe that the current system does that? Also, you could begin the tax at some particular level of income. The main argument for a progressive tax seems to be that you don't want people to earn too much money, or am I wrong?If more money is needed than the system takes in, you could raise the percentage. Remember as well, it's only one of a myriad of government means to get revenue. It's also important to remember that, well, you are supposedly getting benefits for this money.