GOP presidential candidate Donald Trump recently re-released an updated version of his book: “Time to Get Tough: Making America #1 Again”.
Trump offers solutions to many of America’s current problems including a way to simplify the tax code while insuring all Americans pay their fair share.
Trump’s plan offers a “1-5-10-15” solution.
Americans earning up to $30,000 per year will pay 1 percent in federal income taxes. The $30,001-$100,000 bracket pays 5 percent, the $100,001 to $1 million class pays 10 percent while millionaires on up will pay 15 percent.
“It’s clear and fair. Best of all, it can be filled out on the back of a postcard and will save Americans big bucks on accountants and massive amounts of time wasted attempting to decipher the tax code,” Trump said in the book.
“Imagine your paycheck was 40 percent higher than it currently is. What could you do with 40 percent more wealth? How many jobs and opportunities for others could you create?”
Other candidates, including Rand Paul and Ted Cruz, have discussed flat taxes and abolishing the Internal Revenue Service.
Would Congress — which controls the power to tax — support such a plan?
It’s highly unlikely.
Consider what the tax code represents in terms of economic impact:
1. The IRS employs somewhere between 80,000-100,000 people.
2. Accounting firms — especially mega firms such as H&R Block — would all be rendered surplus to needs, although, state taxes might remain complex enough to require help.
3. Advertising for accounting services would leave the sponsor market, hurting companies reliant on sponsor dollars.
The flat-tax plan hurts politicians:
1. The government would no longer have a “punishment” tool such as the IRS. As we learned with the Tea Party/Lois Lerner scandal, the IRS can be used as a weapon against ordinary citizens and organizations — both for- and non-profit.
2. Politicians would no longer be able to use tax cuts as a campaign weapon.
3. The same theory for No. 2 applies in terms of crafting laws with certain provisions, tax breaks, write-off’s and other “incentives”.
It would be interesting to see if states — those that have income taxes — followed suit or if they would maintain a convoluted, draconian tax code.
Unless you work for the IRS, the accounting business or sell ads to accounting firms, a flat-tax deal benefits a huge majority of the nation. And we all know that common sense legislation resulting in smaller government, lower taxes and less political power for the Washington elite has zero chance of becoming law. It would be akin to politicians voting for term limits.
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