The Case for a Flat Tax

Author: PragerU
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5m 24s Lenght
8135 Rating

What would happen if there was just one tax rate for most Americans? Would that be fair? Could it even work? Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, explains. Donate today to PragerU: http://l.prageru.com/2eB2p0h Download Pragerpedia on your iPhone or Android! Thousands of sources and facts at your fingertips. iPhone: http://l.prageru.com/2dlsnbG Android: http://l.prageru.com/2dlsS5e Join Prager United to get new swag every quarter, exclusive early access to our videos, and an annual TownHall phone call with Dennis Prager! http://l.prageru.com/2c9n6ys Join PragerU's text list to have these videos, free merchandise giveaways and breaking announcements sent directly to your phone! https://optin.mobiniti.com/prageru Do you shop on Amazon? Click https://smile.amazon.com and a percentage of every Amazon purchase will be donated to PragerU. Same great products. Same low price. Shopping made meaningful. VISIT PragerU! http://www.prageru.com FOLLOW us! PragerU is on Snapchat! Facebook: https://www.facebook.com/prageru Twitter: https://twitter.com/prageru Instagram: https://instagram.com/prageru/ JOIN PragerFORCE! For Students: http://l.prageru.com/2aozfkP Sponsor a Student: http://l.prageru.com/2aoz2ht JOIN our Educators Network! http://l.prageru.com/2aoz2y9 Script: The American Revolution started as a tax revolt – over a single tax on tea! Now look at us. It seems like everything we do is taxed. The system behind these taxes is a bureaucratic monstrosity; a dead weight on the economy. And it erodes our trust in the government that's taxing us. If you have enough lawyers, lobbyists, and loopholes at your disposal maybe you can game the system. That's fine for big corporations and wealthy individuals, but what about the small business owner or the middle class taxpayer? He just has to shut up and pay up. Nothing better illustrates the disaster that our tax system has become than the mother of all taxes: the federal income tax code. This tax alone, with all its attendant rulings and interpretations, is estimated to be about 10 million words – and rising! Several years ago, Money magazine took a hypothetical family's finances and gave the numbers to 46 tax preparers. Forty-six different estimates came back. In some cases those differences ran into the thousands of dollars of what the family owed. This from experts who are considered to be the best in the business. But the taxes themselves are only part of the cost of this toxic code. There's also the cost of compliance – the time, money and effort it takes Americans to prepare their taxes. A George Mason University study puts the annual cost of compliance as high as $378 billion and the total annual economic cost (including work hours) at more than $600 billion. Again, these are annual costs – as in every year! That's a lot of money that could be used in more productive ways – creating new products, new services, new medical devices, new cures for diseases. Clearly, the time has come to drive a stake through the heart of this tax monster. So, what should be done? Like most things, the best solution is the most simple: A single flat tax with no deductions, except for a deduction for each adult and for each child. Fill out a sheet of paper or key in a few numbers on your computer, and you're done. This one change would not only make every citizen's life easier, it would also transform government, our economy, and our society by ending the complexity that gives bureaucrats and politicians so much power. They have power because they're the ones who dole out the tax favors. It wasn't always this way. There was a time when corporations primarily lobbied Washington to keep government out of their businesses. That has changed. In the words of The Atlantic, “The evolution of business lobbying from a sparse reactive force into a ubiquitous and increasingly proactive one is among the most important transformations in American politics over the last 40 years.” This favor-seeking is centered on getting special treatment and tax breaks. A flat tax will help us begin to scale back that special interest-loving, crony-capitalist big government that we all complain about. Everyone would pay less – not only in taxes, but also in compliance. Investment and job creation would skyrocket. We'd experience a recovery that would grow the tax base and – irony of ironies – ultimately generate more revenue for government. I go into this in much greater detail in my book, Reviving America, but here, in essence, is how it works. For the complete script, visit https://www.prageru.com/courses/economics/case-flat-tax

Comments

  1. Does this system create the same amount of tax revenue for the country?
  2. The main argument of this video is that removing deductions would simplify the tax code. Sure, but why not have a progressive income tax without deductions? no argument has been presented for why a FLAT tax is specifically better than any other tax without deductions.
  3. no tax no problem
  4. FairTax for the win!!
  5. Would a flat tax, and the tax system explained above (I agree is NOT a true flat tax as it includes deductions and income brackets) be the same on capital gains too? As it claims Business and Individuals pay the same, I'm thinking yes, but it hints this is an income tax, and so not sure if it considers Capital Gain in that category.
  6. Did you guys know that a parent with three children and making around $20k-$30k not only pays no federal income tax but typically RECEIVES about $10k?
  7. PragerU TROLLs Real News. PragerU SUCkS!!!!!!!
  8. 1. Why does no one ever suggest a exponential tax? I.E. Why is tax always hard capped instead of soft capped? It would be way more logical if tax where tax followed a y=x^2 graph till the 17% limit for example. Otherwise people just consistently try and stay just below the cap.

    2. As others have mentioned this isn't a flat tax.

    3. Personally I believe a luxury tax should be the only tax.
  9. 1) even if a family income is about 20,000 or 30,000 with stagnant taxes. Now no longer redirected to help the poor, they still have to deal with rising price increase and increase pricing in housing cost due to gentrification.
    2) while I will agree The loophole prevents any impass. You did not address military cost, and the discretionary budget on the military which makes up about 54% of our budget and rising due to a 50 billion dollar increase due to Trump. Infrastructures should also be addressed as many investments only have long term profits and many companies prefer short term gains which would disregard the rest of our decaying infrastructure.

    3) while lower taxes do allow for increased spendings, it assumes for a competitive market and low cost which is disengenous especially when markets are very predatory, especially when many advocate for an elimination of minimum wage.
    4)lobbying. Steve Forbes the balls you have on lecturing about lobbying when you donate millions to superpacs and lobbying for lower taxes. Rather than try to
    repeal the citizens united and other court cases that encourage money to talk rather than public opinion.
  10. This all sounds really good. I am new to the tax process so sorry if this is a noob concern. i do support a flat tax, however i do see one issue; you said families with "Y"# of members making "X"# of dollars or less are exsept from this tax. What is to stop people from hiding their incomes to avoid paying the tax? I do not think it is fair to offer any exception to anyone. 17% of 1000 is 170 and 17% of 100 is 17. Because this is a flat percentage it scales across any wage? If you can clear this up here i will buy your book. I have other questions for exsample how did you get 17? I was guessing it would be a higher number? I assume that is in the book?
  11. Thank you.
  12. I would consider myself a republican but from all the Articles I've read and all the studies I've seen the biggest cancer in our tax system is how big companies can manipulate and sleazebag their way around paying their fair share of taxes
  13. How can you prove that someone makes 52.8K? I can say im unemployed and making 20K a year, and secretly be selling so much cocaine on the side
  14. Flat or not, progressive or not...why do we still have taxes on income?
  15. Interestingly, using the same calculator. If all my income was from interest/dividends from investments, rather than wages, I'd pay no income tax under Forbes' plan. I even entered an annual income of 100,000,000, and still no income tax. Hmmm, so people who make money solely from interest dividends of investments and accounts (like Forbes and Mitt Romney) would pay no taxes?
  16. Fair tax IS a flat tax.  A regionally determined allowance for basic food, clothing and shelter should be exempt, since LIFE should not be taxable, but beyond that everything you buy should be taxed.  Same rate for everyone.  Don't want to pay taxes?  Live like a hermit and keep your millions in flour sacks, but somebody will eventually end up with that money and they will spend it. 

    No "corporate" tax, since that's a tax on consumers.  Just a sales tax on end users.  Pay into society in direct proportion to what you get from living in society.

    There would be a libertarian revolution overnight if people saw what they REALLY pay in tax, rather than having it hidden in the cost of everything they buy.
  17. The problem with a Flat Tax is the same problem we have with the Income Tax. The Flat Tax Law would need to be written as Voluntary but enforced as if it were Compulsory. As the written Income Tax Law is Constitutional because it is Voluntary to contribute. It is pure Fraud and Force which "seems" to compel People to contribute. A 1040 Form is loaded with information which may be used against you in Court. It obviously would be unconstitutional (5th A) (4th A) if to file such forms were Compulsory compliance. The Law would be Constitutional if it is Voluntary compliance. Just as in the Miranda warning.
  18. Never agreed with lobbyists. Yes, on flat tax.