by Forrest Baker

Created on: September 17, 2010

Throughout history every state has required it citizens to bring a tax to whatever central power existed. Be it king, despot, commune, church, republic, or democracy. The purpose for this has been anything from despotic lust to common interest, however regardless of the purpose one thing has remained a constant throughout history, summarized back by Chief Justice John Marshall in McCulloch v. Maryland that, "The power to tax is the power to destroy."

The current system of taxation in this great nation that we live in has become complex, convoluted, and fraught with special interests that elevate groups, individuals, and corporations. This mess of tax law will never be done away with as too many gain too much. For the sake of argument if it did go away lets explore the best taxable option moving forward, the flat tax.

The reason why a flat tax is the best solution is myriad. One reason to use it is that it allows for a simple formula to be implemented to extract money from the tax payer while allowing government the ability to forecast out the most likely outcome of any given year to year revenue. If the tax is at 10% and the GDP is growing at a rate of 3.5% percent a year with inflation holding steady at 2.8% then the most likely amount of funding that the government will receive will be over the next 10 years is an easily forecasted amount.

Another reason for using the flat tax is that if politicians decide they want to implement a new program then they must convince everyone that the cost of the program is worth it. Currently they hide behind promises of delivery and then either spend borrowed money or force one segment of the society to pay for it. Both solutions are dishonest at best and criminal at worst. By enacting a system of taxation based on a flat income level the ability of politicians to play on the emotions of voters by promising they will take from some in order to give to others disappears and the politics of justifying why something is correct and should be paid for takes greater significance.

Finally the question as to why should we tax income rather then goods and services. The answer to that is that while either solution should in theory amount to the same amount of money, income, rather then each individual thing purchased, is a simple elegant solution that can easily be managed. At most people will have a dozen or so sources of income rather then the thousands of goods that exist. The documentation of those few transactions of payment of income is much simpler then the tracking of ever single thing spent on ever single good.

The flat tax is an elegant, simple, and wonderful solution to a tax code that has become mired in corruption. It will never be implemented because it is an honest solution that disallows many of politics favorite tricks and infighting moments of catering to constituencies. Maybe one day we will be an honest and forthright nation that can embrace this simple elegant method of taxation, but not yet.

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