The latest video from Prager U makes a compelling case for a flat tax of 17 percent, arguing for an end to loopholes and crony capitalism.
Presented by Steve Forbes, the video first decries our current tax system as a bureaucratic leviathan that enables lobbying and loopholes for those with the most power. A tax code with 10 million words offers countless ways people can either game the system, get screwed by it, or get lost in it, depending on the quality of their tax lawyers or accountants.
An example of this enigmatic maze was a study done by Money magazine in which it "took a hypothetical family's finances and gave the numbers to 46 tax preparers," and the results were bewildering to say the least.
"Forty-six different estimates came back," says Forbes. "In some cases those differences ran into the thousands of dollars of what the family owed from experts who are considered to be the best in the business."
Then one has to consider "the cost of compliance – the time, money and effort it takes Americans to prepare their taxes," which can ran into billions of dollars annually based on cost and time alone.
A George Mason University study puts the annual cost of compliance as high as $378 billion and the total annual economic cost (including work hours) at more than $600 billion. Again, these are annual costs – as in every year! That's a lot of money that could be used in more productive ways – creating new products, new services, new medical devices, new cures for diseases.
How can we "drive a stake through the heart of this tax monster," as Forbes puts it? Simple: "A single flat tax with no deductions, except for a deduction for each adult and for each child."
Forbes made this argument in his book, Reviving America, where he calls for an end to crony capitalism, an end to corporations and big business lobbying the government to come out ahead while the middle-class has to pay in full. Should this be implemented, Forbes predicts "we'd experience a recovery that would grow the tax base and – irony of ironies – ultimately generate more revenue for government.
The new 17 percent flat rate would apply to both individuals and corporations. "What about the poor," you say? Rather than burden them with an unaffordable rate, Forbes says the minimum income before taxes should be raised to $52,800, "double the current federal poverty level."
What are we waiting for?
