Speaking of taxes........

[Hyoi]

The Sum of All Fears.....not by Tom Clancy

June 9, 1998
The Freedom to Choose Flat Tax
by Stephen Moore
Stephen Moore is director of fiscal policy studies at the Cato Institute.

Why is an idea that is so unambiguously in the national interest -- with economic benefits that could easily raise family incomes by thousands of dollars a year -- completely stalled politically?

The answer is obvious: because the political hurdles are nearly insurmountable. The flat tax tries -- in one fell swoop -- to topple every well-funded special-interest lobby in Washington, from tax attorneys, to life insurance agents, to realtors and mortgage bankers. Each of those groups will spend fortunes to protect the hundreds of billions of dollars in tax favors and loopholes they have successfully carved out of the tax code. We got a taste of how insidious and effective the anti-tax-reform campaign can be during the 1996 New Hampshire presidential primary when the housing lobby spent millions of dollars on TV and radio ads against the Forbes flat tax.

The home mortgage interest deduction, the charitable deduction and the write-off for employer-paid health care are three of the most sacred-cow tax write-offs in the internal revenue code. They and other tax carve-outs are so imbedded in the current economic structure and political culture that trying to eliminate them is almost certainly futile -- and perhaps political suicide.

It is time for flat taxers to stop trying. ( I disagree strongly) Tax reformers must now acknowledge the message that the political marketplace has been sending us for the past few years: the flat tax has broad-based appeal to voters, but there are still many millions of Americans who are emotionally attached to tax deductions and are very suspicious of politicians who want to take them away.