Monday, August 17, 2015

Flat Tax v. Fair Tax

___The Flat Tax is becoming popular again. Steve Forbes has been a supporter for years. Ben Carson with his tithe is favoring a Flat Tax. It is still an income tax and there is still an I.R.S.! Will it be truly flat? Most will insist on deductions for charitable giving and mortgage interest. How many other "must have" deductions would have to be kept? Steve Forbes "post card return" will grow!

___The Fair Tax is a consumption tax. The first step is the repeal of the 16th Amendment. That gets rid of the income tax legally and most if not all I.R.S. employees. Ted Cruz would jokingly send them to guard our southern border, and I must admit I.R.S. auditors could scare illegals. The Fair Tax is not regressive like a simple sales tax. It has a prebate which sends a monthly check for necessities - up to the poverty level - to everyone. As Huckabee has stated F.I.C.A. taxes on wages are not sufficient to fund Social Security and Medicare/Medicaid. Capital gains and illegal income are not taxed. Eventually these programs will be bankrupt and must be paid from general funds. Christie is also correct that the eligibility age must be gradually increased. When passed in 1935 the average age at death was about 64 - less than the age for eligibility. The dramatic increase in life expectancy may not be ignored. As has been said entitlement reform must be discussed since it plus interest make up 71% of the budget. To continually debate the 29% discretionary part and ignore the 71% is folly!

___The truth is Congress must be forced to pass tax reform of any kind. Their power is in the 70,000 pages of favors and social engineering of the Code.

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