Posted by
grad_1986 on Wednesday, February 17, 2010 3:40:44 PM
For the TEA Party to truly begin to change Washington it needs to get beyond protests with whitty signs and banners and begin to form behind policies that will change politicians minds. The most radical of these is the FLAT TAX idea. It's a radical idea mainly due to the fact that we have lived so long under the "Progressive Tax system" that we begin to believe there is no other way to collect revenue. Even people like Hugh Hewitt have disdain for this idea (and he is a so-called Republican) and that is why even more I think it has merit. For when an idea gives even entrenched politico's (ie lawyers) like Hugh sleepless nights, I think we are on to something here and it deserves more exploration.
Reason #1: All must bear the burden.
Today almost half of all Americans pay NO TAX to the Federal Government but instead receive thousands of dollars in benefits. This makes for a system where the receivers vote into office more politicians who will keep them warm and fed at no cost to them. What happens when 60,70 or even 80 percent live off the government and the other 40,30 or 20 percent pay all the bills? This is why our progressive-tax system has got to go for it creates a system of "moochers" (welfare recipients) and "panderers" (politicians).
Reason #2: Simplifies our businesses.
Today, even the most smallest of businesses must employ a host of accountants and tax professionals to help them navigate the endless maze of tax rules and regulations and thereby reducing the number of employees they can higher and create REAL wealth. What is REAL wealth? Simply put, creating products that can be sold here in America or abroad. While hiring tax accountants does employ a "person" it does not generate REAL wealth. Same can be said about, lawyers, accountants and government employees (see my blog on "We need REAL jobs"). Changing the tax system to a FLAT TAX will free up thousands of small businesses across our country and have the same effect on people as Lincoln's freeing of the slaves. Small businesses will feel free to grow to become large businesses, a level which many owners will tell you that above 50 employees you enter a whole new realm of legal and tax requirements that often keeps people from truly realizing their dreams
Reason #3: Stop all loop holes NOW!
No longer will there be rules for the rich and rules for the rest of us. will pay the same percentage of tax despite their level of income. For example, super-rich boasts that he pays less tax (percentage wise) than his secretary. Does he have special tricks that only he can access? No. He simply lives entirely off of the profits he gains from his long-term-stocks. These taxes are capped at 15%. Since he receives no other income to speak of his tax rate never goes any higher. While this is not technically a "loop-hole" many other wealthy people do make use of sections of the tax code that you or I will never be able to. By changing to the FLAT TAX which has no loop-holes, we all pay our fair share.
Reason #4: Give more people reasons to invest.
Today the biggest reason many people do not invest in the stock market isn't because they are risk-avert, but instead they are IRS-avert. How much do I have to pay? When do I have to pay it? Everytime you look around another "tax-free-account" is being pushed in congress. 401K's, 529's, varieties of IRA's, Health-care-accounts and the list goes on and on. Rather than decrease the tax rates and make our lives simpler, they push more and more complexity on us with more and more decisions. I, myself, have to check 3 different tax-free-accounts to see how all of my investments are doing. Each account also has a variety of restrictions and mutual funds to choose from. With the flat tax all that goes away and gladly so. (I would rather pay a little tax and not have the frustration of juggling all these accounts). Also, the question of how much I owe and when to pay it is solved as with the flat rate, all banks and investment firms could mail in your tax for you to the government on a quarterly basis since there is no question about how much you owe (a problem with the progressive tax system). No more April 15th deadlines and anxiety. Also the governement gets their money on a more regular basis as well with NO REFUNDS, thereby making it easier for them to plan their annual budgets as well.
The TEA Party should get behind initiatives like the FLAT TAX and give the politicians something to really think about before next November.