Lately, I've become more and more strongly in favor of scrapping the US's current federal income tax system and replacing it with a flat tax. This has been influenced to some degree by posts at both One Hand Clapping and Outside the Beltway that I've read recently. And when I say flat, I mean flat. The only "loophole," if you will, should be an appropriately generous personal exemption, something along the order of $20,000 per adult.
To me, the biggest factor which would make this type of tax system unfair is the huge difference in the cost of living in various parts of the country. Of course, people can move, but it's much harder for those who don't have much money living in, say, New York City, to be able to move to some rural community in Middle America where costs are much lower, but ultimately it's all a matter of priorities. What's more important to you? If you want it badly enough, you can make it happen. And if you just never manage to find a way to make it happen, that's ultimately your decision.
But wait, you ask, how about exemptions for children? Nope. That's your choice to have children. Do we really want folks deciding to have children based on tax benefits? You decide whether or not to have children, and how many. To me, government has no responsibility in this arena.
Next would be the home mortgage exemption or, more precisely, the exemption for the interest paid on home mortgages. Nope. Again, it's your decision on whether or not to buy a house, and how much to pay for it. If you can't afford it, don't buy it.
Then there's the exemption for state and local taxes. Doesn't this really mean that that money is actually being taxed twice? Probably, but it's not being taxed twice by the same governmental body. Those taxes serve two different purposes, provide for different services. Also, I'm not really fond of the fact that some of my federal tax dollars are subsidizing governmental services in high-tax states. In our system of government, the states are allowed to make most decisions about what services they provide and how much they're going to tax their citizens to support them. Fine. Just don't ask me to help pay for it when I don't have any say in the matter.
How about exemptions for charitable donations? Nope. I'm big on charities, plus I believe that a lot of the work currently being done by governments should be done instead by charities. But they need to stand on their own. If they convince potential donors of their value, they'll get the donations.
When I say flat, I mean flat, baby!
What it boils down to is my aversion for using tax law as a social engineering tool. We want to promote families, so we give tax breaks for children. We want to support home ownership, so we don't tax you on the interest paid on the mortgage. Bah, I say! We should minimize government's involvement in our lives. Government currently both takes too much from us and gives us too much.
I know my position will generate contempt from both the Left and the Right. If so, I'll choose to interpret that as validating the rightness of my proposal. :) Too much of government today gets into the imposition of morality on the people. A certain amount is unavoidable (criminal laws are all based on moral judgments, after all), but we need to minimize that as much as possible. And a good place to start is with tax law.
