Flat tax.
I seem to remember Steve Forbes and others suggesting a flat tax several years ago. I'm sure most proponents have ulterior motives (e.g. it would lower their tax rate), but the proposal's cleanliness and simplicity are appealing. While I think my proposal would have a graduated rate (see e.g. rate = 20*arctan(income - $15,000)), rather than a flat rate (see e.g. rate = .3), I would be in favor of doing away with those messy deductions and exemptions and whatnot (so that everyone within a particular income level pays the same amount of tax as everyone else, and the childless renter doesn't get hosed; and so that clever accountants will be forced to find new, more productive careers).
But then I started thinking about it, and remembered our Constitution might actually have something to say about this. In our First Amendment, we have a little thing called the Free Exercise Clause, which forbids Congress (and through the Fourteenth Amendment, the States...well, not really, because the Supreme Court screwed up many years ago by neutering the Privileges or Immunities Clause, thereby necessitating the strained and silly practice of incorporating piecemeal the rights contained in the Bill of Rights through the Fourteenth Amendment's Due Process and Equal Protection Clauses...but that is a discussion for another post) from passing laws that "respect" the free exercise of religion. And I'm willing to go out on a limb and suggest that taxing an individual's contributions to a religious charity "respects" her "free exercise." Which may mean that the Constitutional mandates deductions for charitable contributions to religious institutions. But then we run into the problem of consistency; why is a donation to a Catholic feed-the-hungry organization not taxed, but a donation to a secular feed-the-hungry organization is? So we'd create more deductions. Also, we'd likely have to stop taxing the income of priests. And churches themselves. And we'd get people demanding their non-profit is every bit as good for the community as that church, and demand similar treatment under the tax code. And I think we'd end up, within a few years, precisely where we are: with a complicated tax code.
So in the end, I'm not sure the benefits of a "flat tax" style simplification revolution is a truly viable goal. Instead, maybe we should be focusing our efforts on a Constitutionally achievable goal: dismantling the military.
But then I started thinking about it, and remembered our Constitution might actually have something to say about this. In our First Amendment, we have a little thing called the Free Exercise Clause, which forbids Congress (and through the Fourteenth Amendment, the States...well, not really, because the Supreme Court screwed up many years ago by neutering the Privileges or Immunities Clause, thereby necessitating the strained and silly practice of incorporating piecemeal the rights contained in the Bill of Rights through the Fourteenth Amendment's Due Process and Equal Protection Clauses...but that is a discussion for another post) from passing laws that "respect" the free exercise of religion. And I'm willing to go out on a limb and suggest that taxing an individual's contributions to a religious charity "respects" her "free exercise." Which may mean that the Constitutional mandates deductions for charitable contributions to religious institutions. But then we run into the problem of consistency; why is a donation to a Catholic feed-the-hungry organization not taxed, but a donation to a secular feed-the-hungry organization is? So we'd create more deductions. Also, we'd likely have to stop taxing the income of priests. And churches themselves. And we'd get people demanding their non-profit is every bit as good for the community as that church, and demand similar treatment under the tax code. And I think we'd end up, within a few years, precisely where we are: with a complicated tax code.
So in the end, I'm not sure the benefits of a "flat tax" style simplification revolution is a truly viable goal. Instead, maybe we should be focusing our efforts on a Constitutionally achievable goal: dismantling the military.
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