By Bill Mann (TMF Otter)
March 1, 2000

First, please indulge me in a rhetorical no-no. It seems that Shannon Zimmerman, my worthy duelist, and I agree upon more than we disagree. Simply put: The current tax code blows major chunks. We also agree that the root of the problem is not so much the application of this or any other tax code but the propensity of our esteemed public servants to spend money on politically motivated boondoggles.

But the Zman has given three numerical points upon which I can take umbrage.

First, he contends that the flat tax does not treat taxpayers equally because incomes are not equal. Let's look at this from a different direction. Are individuals being taxed based upon their burden upon the system? That is another definition of equality: usage fees based upon individual propensity to utilize the public works. Seems fair, doesn't it? But certainly public programs such as welfare would collapse under the weight of this logic. Incomes are not equal, nor should they be in a free enterprise system.

So to what end should a taxation system be used to try to mandate equality, or fairness? The answer is that they shouldn't, and that is exactly the problem with the current progressive system. It covers a punitive tax methodology under the cloak of compassion for the less well-off. And in the end, those who have little access to the rafts of exemptions, the middle class, bear the brunt. Under a flat tax, which, since it has a minimum income for exemption, is in fact progressive, each family would roughly pay the same percentage of income, regardless of source.

Second, we have a morally bankrupt tax system. Any system that has the potential for changes that benefit one subset of a public over another, has the same weakness. By eliminating the source of income as an issue, the flat tax does something that no other tax code that has subjective criteria could do: eliminate the potential for those in power to use the power of selective taxation to their advantage.

And third, of course it's about the money. It's about my money. It's about everyone's money. But the object of taxation is also about money, and how it is allocated from the private sector to the governing bodies. The more complicated this process is, the more easily corrupted it is. Tax reform has at its roots three things: money, morality, and fairness. The goal should be, for the long term, to maximize all three. By removing the whims of the politicians from the process as much as possible, the flat tax is a rational path to achieve all three.

Is the flat tax going to be perfect? No. In fact, there will be a certain subset of people who will have to pay more taxes as a percentage of their income. But it would remove so much of the corruption and inefficiency from the taxation process, it would encourage savings and investing, and it would give back a vast majority of those 616,000 years of annual tax administration wasted by Americans. That, in and of itself, makes the flat tax a worthwhile consideration.

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