Flat tax proposal is like winning the lottery — worth dreaming about but not worth much more

“Imagine a 10 percent income tax, with every American filling out his or her taxes on a postcard or iPhone app. And abolishing the IRS as we know it.”

~ Ted Cruz, candidate for U.S. president

OK, let’s imagine a flat tax for a minute.

  • I wouldn’t have to calculate the value of the 10 pairs of men’s jeans I donated to Goodwill (because there wouldn’t be a charitable deduction).
  • I wouldn’t have to track down the three different 1098 forms from last year that calculate the interest paid on my first mortgage, second mortgage and refinanced mortgage (because there wouldn’t be a mortgage deduction).
  • I wouldn’t have to figure out how much we contributed to the 401(k) (because there wouldn’t be a deduction for retirement savings).

That was a pretty nice minute spent imagining. Since I spent several hours tracking down the aforementioned items and about 100 others as I prepared for tax season.

Fun afternoon. Who likes that kind of minutia?

I’m not saying I’m a Cruz supporter (please do not pelt me with wet noodles — I’m just considering one of his proposals), but I really would love a simple flat tax, especially the one Cruz is calling for since it’s nearly half what this household is paying now (in the interest of fairness, I must tell you that Cruz critics say his plan would bankrupt the U.S. government, but I’m looking at my selfish picture here for one minute, not the country’s).

No one can say they love tax time. Not even a tax preparer — maybe they love the paychecks, but the work this time of year is crushing. (They’d all be out of a job if we had a flat tax because who would need help filling out a postcard, right?)

People who get refunds? (What’s a refund?) Do they like tax time? Well, they shouldn’t. A refund only means they gave the government an interest-free loan. If there was a flat tax, there would be no such thing as refunds — because the 10 percent would come out when the money was earned and there would be no quibbling about it.

Imagining a flat tax is fun, but the hard reality is that something as simple as a flat tax will never happen in the United States. Way too many special interests have a stake in deductions of one sort or another or in the tax preparation industry. Abolish the IRS? Ha! The realist in me just doesn’t see it happening.

But it’s nice to dream.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s