WSJ’s John Fund on Flat Tax and FairTax
Writing for the Wall Street Journal’s Opinion Journal, John Fund penned an editorial yesterday titled “The World Is Flat,” where he had this to say about the flat tax and, somewhat by extension, the FairTax:
Here at home the flat tax is still routinely ridiculed. When Mr. Forbes floated the idea in 1995, President Clinton joked that Republicans were becoming “the party of flat-earthers and flat-taxers.” But he has also told friends privately that he got a real scare during the 1992 primaries when Jerry Brown championed a flat tax. Mr. Brown won applause from audiences by pointing out that under our current system the rich will always be able to hire experts to lobby for tax loopholes and avoid the higher rate traps set for them.
That logic and the practical realization of it in country after country is winning adherents from all walks of life in the U.S. Donald Trump is full of praise for Mr. Forbes’s new book, “Flat Tax Revolution.” Actor Clint Eastwood praises a flat tax because it would mean “a little old lady on a home computer [could do] the work of all these thousands of bureaucrats and accountants.” A variation on the flat-tax idea, junking the income tax in favor of a single-rate national sales tax is also gaining popularity. “The Fair Tax,” a new book by Rep. John Linder and radio talk-show host Neal Boortz, is currently topping best-seller lists.
So here’s hoping the Bush tax reform commission is bold enough to at least propose some steps towards a dramatic flattening of the income tax code. It may be a matter of long-term economic survival. America’s taxes on profits are around 40%, when you combine federal, state and local levies. With the possible exception of Japan, that rate is about the highest of any developed nation in the world today. If the U.S. doesn’t adopt the flat tax it may find itself losing jobs, capital and ambitious entrepreneurs to nations with a more ambitious growth agenda.
Alvin Rabushka, a senior fellow at Stanford’s Hoover Institution, believes it’s only a matter of time before an emerging economic superpower like China or India goes the flat-tax route. His book on the subject has just been published in Chinese, with a preface by Lou Jiwei, the vice minister of finance. If China adopted a flat tax, more than a quarter of the world’s population would be filling out tax returns on the back of a postcard. That would leave them a lot of time and money to eat our economic lunch.
The FairTax only rated two sentences?? Somebody give this guy a nudge.
In the interim, see his full editorial for more information.
