Puff Goes The Magic Flat Tax Dragon Dream
Two scribes, Dave Carpenter and Stephen Ohlemacher, were chastised for writing in the Huffington Post how the estimated $1.1 billion fortune of George Steinbrenner might escape inheritance tax to his heirs because of the timing of his death Tuesday. My colleague felt the timing of the article was rather crass.
I know the feeling. I wrote a column on the day Sen. Robert Byrd died, noting only that he was the king of pork barrel legislation. Crass, a friend said.
Steinbrenner’s fortune was timing. He died in a year of no inheritance tax for person’s whose estate is worth more than $3.5 million. It was pointed out that the New York Yankees owner, among many acquisitions, was worth about $1.1 billion.
That got me to thinking. The most creative writers on earth are U.S. politicians. The only ones more creative are the attorneys who find loopholes in the U.S. Internal Revenue Code.
Being a group effort stretching over more than a century, the code makes short stories out of Leo Tolstoy’s “War and Peace” and “Anna Karenina” and John Updike’s Rabbit series.
I have several theories about taxes:
If something wiggles, tax it. When it stops wiggling, tax it one more time just to make sure it is dead.
Politicians determine in their infinite wisdom — my favorite derisive expression for group think — what is best for the public good as if they really know. And then tax all for something that benefits few.
One of the reasons I loved Bill Clinton was that he recognized “tax” as the vilest of four-letter words. He simply changed the name to a 10-letter word: “Investment.”
Personally, I favor a flat tax on earned income and a national sales tax on all purchases. Let the states, counties and cities come up with their own devices.
The flat rate seems to range from 10% to 30% in (cringe) socialist states. The sales tax would range in the penny to nickel bracket.
The immediate impact of the Remmers legislation would throw millions of IRS employees and their satellite industries in the private sector out of work. Consider the number of attorneys in that crowd if it makes one feel better.
The good thing about this form of taxation is that it will define budget incomes and therefore have a direct bearing on spending — as long as the Fed doesn’t print money as it is prone to do. But that’s another wrinkle to be ironed out another day.
The incentive would be the same as today. The healthier the economy, the more income to Treasury.
All those political juices squeezed to find new taxes could be put to use figuring out new ways to produce jobs.
I’m told the big financial institutions are sitting on tons of equity that could produce jobs but they fear the impact of new taxes and regulations. The flat tax would clear one hurdle.
Speaking of regulations, wouldn’t it mean they would be more judiciously applied to prevent undo risk and promote safety for the benefit of the federal government and big business to make as much money as possible.
Excuse me. This was all a dream. I just awakened to the real world. The Democrats in Congress were attaching pet domestic spending projects to the military defense appropriations budget.
Cross posted on The Remmers Report
Comments are welcome. Link to my blogsite or go to my email address at [email protected] . Remmers’ varied career spans 26 years in the newspaper business. Read a more thorough resume on The Remmers Report.