September 30, 2005

Flat Tax

If I ever complain about taxes to people, they always say something like, “yeah well, I think there should be a flat sales tax”. The first problem is, up until that flat tax is initiated, people will buy a bunch of new stuff and won’t buy anything else again for years. That will be a problem. Okay, ignore that. What about poor people? Are we going to tax them too? Right now they pay nothing or very little and presumably they’ll be paying more with a flat tax than they do now. Maybe that’s good? The middle class didn’t have to pay income tax at first and now, 70 something years later the middle class is paying almost half of all taxes (I made the “half” part up but it’s true that the middle class didn’t pay much 70 years ago). Maybe it’s only fair for “poor” people to start paying for the freedom we all enjoy (I say “poor” because a lot of poor people have two car garages, more than a few kids and big screen TV’s . . . there’s a difference between poor in the US and really poor).

Okay you say, lets not burden poor people with the tax they can’t pay in the first place. So, what is “poor”? Is that defined by, I don’t know, income? OH NO!!! Can’t be by income because then the flat tax wouldn’t be so flat anymore. So, in this flat sales tax system, how to we avoid taxing the poor?

I think a flat tax would make poor people poorer and rich people richer (about the same way it works now). Did I mention that with a flat tax you wouldn’t be taxed on investments . . . you know, property and stock? Those sound familiar? Poor people know all about owning property.

What am I missing?