Cal Thomas: Benefits of the flat tax

PAUL BUTLER, HOST: Today is Thursday, August 25th. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Paul Butler.

MYRNA BROWN, HOST: And I’m Myrna Brown. We spoke earlier about some of the challenges facing the Internal Revenue Service. Perhaps there’s a simpler way to make sure taxes are properly filed and collected. Commentator Cal Thomas now on the benefits of the flat tax. He admits it’s not a new idea, but Cal says its simplicity and moral clarity have never been more relevant.

CAL THOMAS, COMMENTATOR: The next time Republicans control all three branches of government they may wish to visit an old idea–the flat tax. When magazine publisher and Republican Steve Forbes ran for president in 1996, the flat tax was at the heart of his campaign.

Forbes lost the nomination to Bob Dole, who lost the election to Bill Clinton. But the idea has merit. Coupled with a serious reduction in wasteful and unnecessary spending, a flat tax could revive the economy for decades to come.

Forbes proposed a 17% flat tax with generous exemptions of $13,000 for each adult and $5,000 for each child. He proposed eliminating “unfair double taxation of personal savings, Social Security, pensions, capital gains, and dividend income. … You deposit after-tax income, let your money multiply in value with compound interest, and then withdraw your money tax-free.”

Forbes also wanted to erase the “unfair alternative minimum tax and ‘death’ taxes,” calling them “regressive taxes that hurt working families, small business owners and especially farmers who want to pass their farms on to their children.”

There was much more, including necessary reforms in Social Security and

Medicare, but the flat tax was key.

Democrats, especially, have benefited politically from the graduated income tax. Though roughly half the country pays no Federal taxes, Democrats have repeatedly made political hay out of denouncing “the rich” and “big corporations” for not paying their “fair share.” The flat tax would put more money in the pockets of people who earn it, instead of sending greater amounts to the government.

I emailed Forbes requesting an update and he responded: “The flat tax is simple, comprehensible, and fair. The only deductions would be for yourself, your spouse, and your children. It would also be simple for businesses—deduct from revenue the actual costs of doing business such labor and materials; investments would also be instantly expensed. … With the flat tax, the country would blossom… and the politics would be less polluted (no more never ending lobbying for special interest tax breaks and credits).”

Forbes also spoke of its “moral dimension”: “The IRS has estimated that we spend over 6 billion hours a year filling out tax forms. Experts also calculate that we spend the equivalent of between $200-400 billion a year complying with this currently corrupt monstrosity.”

The Tax Code is a foreign language to many. As of 2018, it comprised 60 thousand pages in 54 volumes. According to The Tax Foundation, the U.S. ranks 21st out of 37 nations in tax simplicity. Estonia has been first for eight straight years. Maybe we could learn from them.

Look at states with no state taxes to see their prosperity. It is a major reason so many are moving from high tax states to those with lower, or no state taxes. Unfortunately, one cannot escape the long arm of the IRS.

A flat tax might help reduce the anger many people have about Washington and big spending politicians, but that would mean Democrat politicians could no longer have the issue and having the issue serves their political interests.

I’m Cal Thomas.

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