WSJ Reviews Forbes’s ‘Flat Tax Revolution’
Today Stephen Moore published a review of Steve Forbes’s new book Flat Tax Revolution in the WSJ’s Opinion Journal.
The review begins:
The flat tax–the same tax rate for everyone, without all the deductions that now complicate the tax code–is an idea with a decades-long pedigree. Politically its high-water mark in the U.S. came in 1996, when Steve Forbes ran for the Republican presidential nomination against Bob Dole and a tired GOP establishment.
Mr. Forbes single-handedly thrust revolutionary ideas into the political headlights–ideas about health insurance and Social Security, for instance, but most famously about the tax code itself. The GOP establishment hated his message, but the conservative rank-and-file loved it. Mr. Forbes was suddenly the talk of the town. There he was, with his signature horn-rimmed glasses and geekish smile, plastered on the cover of Time magazine. And for a brief moment it appeared that he might even win the nomination and topple the Republican establishment.
But then various deep-pocketed interest groups stirred themselves into action. In January 1996, for instance, the housing industry spent millions of dollars on TV and print ads explaining to New Hampshire voters that Mr. Forbes’s flat tax, by eliminating the mortgage-interest tax deduction, would destroy the value of their homes and send their tax bills through the ceiling. Not a word of it was true, but truth is often a casualty in political polemics. Mr. Forbes fell like an oak.
Later in the review, Moore notes that Forbes should be more gracious in his characterizations of the FairTax:
The only low point in “Flat Tax Revolution” is a gratuitous attack on the idea of a national sales tax, the so-called Fair Tax. Mr. Forbes writes that, because the fair tax offers a universal rebate to all Americans, “poor taxpayers may resent that their well-off counterparts are getting the same amount they are.” But the flat tax also has a “universal rebate”: The first $40,000 of income for a family of four is not taxed.
The truth is that these two reform plans have a lot in common–low rates, uniformity, simplicity–and they both run circles around the current system, which is every bit as bad as Mr. Forbes says it is.
See the full review for additional information.
There is a reason the Fair Tax is named the way it is. It is the only form of taxation that is fair to all. Rich and poor alike. The Fair Tax allows taxation to be a choice. If you consume you pay tax if you don’t consume ( I’m not sure how you do that) you don’t pay taxes. What a concept. Shrink bureacracy and keep the government well funded. The flat tax and most other lame ideas do nothing for the waste created by the IRS in government, industry and citizens. I can only hope that more people become well informed and the ground swell keeps swelling.
Hold on to your hats. I think any talk of tax reform may have been sunk by Hurricane Katrina.
You’ll be seeing lots of calls to raise taxes. People just don’t seem to get that giving the government even more money will not make them more responsible.
It’s very encouraging that Flat Taxers and Fair Taxers will debate the merits of each position. Administering the sales tax would become a nightmare as you try to send money back to the poor. Besides, taxing consumption will slow the economy as everyone deliberately limits their spending $1.23 to buy $1.00 items.
A great beauty of the Flat Tax a la Forbes is that it is indeed fair, simple to administer, AND IT’S OPTIONAL.
Please read Forbes’ book; this country will soar again!
Steve, a couple questions:
1. Have you read the FairTax book?
2. In what way is the Forbes flat tax plan optional?
Taxing consumption is not detrimental to the economy; rather, it is beneficial, as the elimination of the income tax will encourage US businesses based in foreign countries to return to America. Thus the economy will only get better under the fair tax.
I would also like to point out that under the present income tax system, corporations can easily evade paying their taxes. With a tax on consumption, tax evasion is rendered impossible, and so everyone has to pay taxes, even the big corporations