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Posted by on Oct 26, 2011 in Business, Economy, Politics | 5 comments

Flat Tax or Flat-Out Dead (Guest Voice)

Keefe, The Denver Post

Flat Tax or Flat-Out Dead
by Michael Reagan

Despite the recent chatter about a flat income tax — a tax that every income earner pays regardless of their level of income — the idea is dead unless its supporters figure out a way to get together and support the idea that a flat tax is a fair tax. I believe we can unite.

In a system of flat taxation there is only one level of taxation. Everybody pays the same rate no matter how much money they earn. Taxpayers are not punished for having succeeded by being taxed at rates higher than that paid by the lowest earners of income.

It’s not a new idea. My dad was a supporter of the flat tax proposal, but he recognized the problems inherent in passing it into law.

One problem has to do with uncertainty and political opportunism. There’s an old adage that decrees that only two things in life are certain: death and taxes. And just as likely is the fact that any proposal to change the tax code — even change for the better — is bound to create uncertainty as people examine proposals in light of their own finances. This creates a wedge for Democrats to use against us.

Democrats and the liberal media are now trying to turn uncertainty into chaos as they highlight every situation that might affect somebody in some obscure way as the result of the various Republican proposals. But we should not lose sight of the fact that their agenda has nothing to do with fairness, and has everything to do with punishing Americans for the “crimes” of earning money, providing jobs, and not wanting to be dependent on the state.

As my dad saw it, the entire federal tax system needed to be revised. I agree that’s still the case. But there is work to be done, and we must not allow ourselves to feed the liberal narrative that Republicans will be unable to unite behind a candidate or a tax plan.

One place to start is to reconcile the Flat Taxers and the Fair Taxers, those who support some sort of national sales tax as in Herman Cain’s 9-9-9 Plan. If neither side will support the other, we will be exactly where the IRS and the administration want us to be — split on an important issue. If we don’t come together on this issue Washington and the IRS can sit back and laugh, and keep their hands in our pockets. And they’ll be laughing at us.

Just remember that a flat tax is a fair tax. Nobody gets penalized for earning more than the average wage earner. No matter how much money one earns, one pays the same rate of taxation everybody else pays. That doesn’t mean they pay the same amount of taxes everybody else pays — merely that they pay the same percentage of their income everybody else pays. Nobody gets punished for making more than the average wage earner.

Unfortunately, there is a segment of our population that recoils in horror at the sight of somebody who, by dint of their efforts, earns more than the average worker or even aspires to do so. Democrats believe that people must be penalized for their success by being forced to pay ever-increasing taxes. In their eyes, success breeds contempt.

This is the group that opposes a flat tax, and they must be defeated in 2012. I have no doubt that Republicans can unite to make sure that happens.

Michael Reagan is the son of President Ronald Reagan, a political consultant, and the author of “The New Reagan Revolution” (St. Martin’s Press, 2011). He is the founder and chairman of The Reagan Group and president of The Reagan Legacy Foundation. Visit his website at, or e-mail comments to [email protected]©2011 Mike Reagan. Mike’s column is distributed exclusively by: Cagle Cartoons, Inc., newspaper syndicate. His column is licensed to run on TMV in full.

  • dduck

    Is it just the Dems that resist a flat tax, because it is not fair and reminds them of the flat world crowd and falling off the edge.
    I bet plenty of accountants and those folks able to take advantage of the myriad loop holes, deductions and subsidies, are sweating a little. Perhaps secretly applauding those openly opposing a flat tax and a gutted tax code and its inherent expenses (30 cents to collect a buck).

  • SteveK

    Michael Reagan wrote: … I believe we can unite.

    This was, for obvious reasons, a good place to stop reading…

    Michael Reagan actually typing the words: “I believe we can unite.” Now if that’s not funny I don’t know what is! 🙂

  • I’m just amazed that Reagan can actually write an article without pointless vitriol. I’m actually speechless.

  • ma ra

    STOP TRYING TO FIX AN ARCHAIC SYSTEM! There is a flat tax that works. It’s called APT (Automated Payment Transaction) tax. Click Its the brainchild of a retired University of Wisconsin PhD (Dr. Edgar Feige) back in 2000. Basically everyone pays in, however because its progressive, the lower and middle class do not get hurt. In fact a family making 50k per year pays only $300 annually. Essentially its a toll booth system whereby ALL transactions in the US economy (now totaling nearly $1000 Trillion, aka $1 Quadrillion) are taxed at .3% (or $3 per thousand). IT ELIMINATES THE NEED FOR ALL, AND I MEAN ALL OTHER TAXES PLUS THE IRS IS GONE!! So you only pay tax when you transfer funds of any kind. Therefore $50k in and $50k out for a standard family income is $100k total at $3 per thousand, or $300/year. If you transact $1 Million, you pay $3000, no capital gains or corp tax. You see, we only tax income and some consumption, at this time. There are trillions is currency exchanges, bond sales, stock sales, etc, etc, daily. Dr. Feige’s plan even considers behavioral changes (reduction in total transactions due to high frequency trader drop-off, etc) to the tune of 50%, so the $1000 Trillion becomes $500 Trillion in total economic transactions. Since both parties in each transaction pay .3% you have a total of .6% of total tax collected. Take .6% of $500 Trillion, and you get $3 Trillion, which is the US Budget, more or less. So Dr. Feige’s plan is a neutral plan, but it re-aligns taxation fairly, with transparency. You pay more ONLY if you transact more, but everyone still pays something. It may sound too good to be true, but if you go to the web site and download his publication, you begin to understand how easy it is. No more capital gains, income tax (personal or corporate), excise tax, gas tax, death tax or sales tax needed. No IRS, no forms, no April 15th, and we save $500 Billion per year in compliance fees. NO loopholes and NO deductions!! The best part is that you’re caught up on your tax bill at the end of each day. Time to move into the 21st Century!!

  • dduck

    Is there any country doing this plan? Has anyone tested this plan?

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