Quote:
Originally Posted by Fair&Balanced
I think the uncomfortable feeling associated with the flat tax has something to do with the "marginal utility of the dollar" or the fact that a dollar for the worker living on a minum age has more value to him in terms of purchasing power than a dollar to the millionaire.
There is also a psychological barrier assoicated with the flat tax. One might tend to have second thoughts when faced with paying $1.40 (30 cent VAT and 10 cent state sales tax) for a product worth $1.00 that you dont experience when you are only paying $1.10 (along with the current income tax that you dont see on each purchase).
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I don't support a VAT because lower income households really do spend every dollar they earn and will be taxed on every dollar UNLESS we create more deductions, credits, and loopholes to help them out. More deductions, credits, and loopholes will be written by politicians and paid for by lobbiests. Who do you think they will really benefit.
I firmly support gutting the tax code. TW has the right idea when he says every politician should be able to complete their own tax forms. Interest on a owner occupied home should be deducted from gross income. After that a simple 1% up to $XX,000 and 20/25/30% across the board on every dollar beyond that. 1 form, done and dusted.