Is it Time for a Flat Tax?

Various politicians and political groups have attempted to implement a flat tax numerous times in the past. Ideas on the implementation of a flat tax system that would simplify and equalize the taxes we have to pay each year have been produced recently and will continue to be brought up in future generations to pass. The simple idea of a flat tax sounds like a great idea to a large number of people and is actually a great way of taxation in practice. However, when it comes to actually implementing a flat tax in America, things become much more complicated than they originally seemed.

Getting a Simple Tax System Would be Complicated

Getting rid of the local taxation system and implementing a flat tax each year sounds like a great idea but what would this flat tax include? We pay multiple forms of tax each year. We pay income tax, social security, Medicare, payroll tax, businesses pay their own set of taxes, and the list goes on and on. If we were to implement a flat tax would it include everything or just certain categories?

If you think you have the answer, it would behoove you to realize this is putting it simplistically. There are a large number of factors included in the tax system we have now for each different tax that has to be paid. How much we are actually being taxed now has to be taken into account when trying to implement a flat tax. The government does not want to start bringing in less than it does now and people do not want to start being taxed more. To say finding equal taxation ground is hard is an understatement.

Special Interests

Then there are tax breaks. There are too many special interest groups lobbying to keep their tax breaks. Politicians are not going to just take these away to lose votes. You need to realize that everyone is out for him or herself when it comes to taxes and their finances in general. No one wants to pay more and everyone wants to pay less. Which means, starting a flat tax at all is going to ruffle feathers on someone somewhere? It cannot be avoided.

Despite all the political semantics involved, there is a single nail that currently puts to rest any possibility of a flat tax being implemented in the near future. That nail is called the economy. In all the talk about implementing a flat tax, how many people have thought about the repercussions it would have on the taxation industry?

Economic Damage from a Simpler Tax Code?

The Internal Revenue Service would either be greatly reduced in size or no longer necessary at all. Tax preparers and organizations would no longer be necessary without laws and guidelines to interpret. With a flat tax, figuring your taxes would come down to simple multiplication that a grade school child could do. Thousands of people would lose their jobs. The hit to the economy would be disastrous, especially during the economic times we are currently facing. Implementing a flat tax now would be like shooting ourselves in the foot. Neither the country nor the economy is prepared in the slightest for the implementation of a flat tax at all.