A Flat Tax Plan With Low End Progression

by: Les Carpenter
Rational Nation USA
Liberty -vs- Tyranny

It seems that politicians and lawmakers have a knack for making things very complicated as well as extremely opaque. Probably by design and so nobody has a clue as what is really happening.

Take the tax code for example. A complex and burdensome piece of law that has accomplished keeping overpaid tax attorneys, lobbyists, accountants, and judges to name just a few gainfully employed.

We can thank the progressives who love the progressive income tax for the $200.00 plus dollars {now that's low end cost} a person shells out each year in tax preparation. Hopefully so their tax burden is ever so slightly lessened.

Sometime ago Rational Nation USA, in one of those moments of inspiration devised a flat tax plan that was simple, and as equitable as anything the nightmarish progressive tax could possibly offer with all its loopholes, deductions, credits, and the rest of the tax code mumbo jumbo.

In light of the Cain 9-9-9 plan, which I'm not yet sold on, and the democrats desire to raise taxes (I'm told the House Boner is on board) I decided to call up my proposal and dust it off and make some slight revisions.

Of course with tax and regulatory reform the size of government would be reduced as well. So lets roll it altogether in a condensed format and maybe someone will take a look and run with it! :)

Recent revisions to a previous post.

In essence our government created a tax code that is as mind-boggling as it is convoluted, requires hundreds of thousands if not millions of pages, and keeps the tax accountants and lobbyists in business. It also creates uncertainty within the business sector and markets, and decreases our competitive standing in the world.

Achieving limited government in taxation would be quite rudimentary and uncomplicated, were it not for the pull peddlers. However, the moment the United States government instituted the graduated income tax with its exemptions, deductions, and loopholes the stage was set for a ever increasing and more complex tax code. Slaying Leviathan will not be easy but it is necessary.

The following proposal would increase individual as well as corporate and business tax revenues, simplify the tax code {so Reagan's idea of the post card size 1040 could be realized} and it would eliminate the need for tax lobbyists that are engaged in “protecting” corporate interests by writing into law loopholes that allow them to pay little to no taxes.

The proposal...

1.1 - Graduated tax shall be retained for individuals whose gross earnings are less 39K. {5% starting at 18K, 6.5% at 25K, and 8% at 32K}
1.2 - Gross earnings above 35K would be taxed at a flat rate.
1.3 - There shall no exemptions, deductions or other considerations that would have the effect of lowering the gross taxable income.
1.4 - The individual tax rate shall be 10% on gross income of 39K and higher. Changing the law shall require a 75% affirmative vote of the 50 states making up the union of The United States of America.

2.1 - Business and Corporate income shall be taxed on the flat tax basis.
2.2 - Business and Corporations shall cease to receive government subsidies and corporate welfare. Too big to fail shall no longer be an operative word.
2.3 – Deductions for businesses and corporations shall be limited to legitimate business expense as defined by current cost accounting principles.
2.4 - Business and Corporate tax rate shall be 10% after deductions for legitimate business expenses as outlined in 2.3 above.

Simple and straight forward, the above would create an environment in which everyone would know month to month and year to year what their tax liability would be. Planning for business investments and expansion would thus proceed on a stable and level playing field.

Plainly put - get the lobbyist out of the picture by revising the tax code, let market forces work in weeding out the unproductive and non competitive businesses. We then would most certainly have a more vibrant and competitive economy. To use an analogy - giving one dog preferential treatment over his fellow dog is both unethical and counterproductive.

A common concern when discussing limited government is the nature of, and need for, appropriate and measured regulation. Few would disagree with the premise government has a role in protecting the public safety. Even the staunchest conservative advocates of limited government support the belief that government has some responsibility in ensuring public and workplace safety, the environment we live in {air and water as examples}, as well as maintaining the public infrastructure {roads, bridges etc.}.

By the same token most can agree the level of governmental regulation {often duplicitous} is costly to business and serves no real purpose in insuring public safety. Beyond staggering costs, the very businesses that create jobs and spur economic growth are significantly and negatively impacted by frivolous and unnecessary regulatory restrictions. I refer you to John Stossel’s spot on video covering the subject of over regulation as an illustrious example of this.

The cost borne by business and corporations as a result of our regulatory framework is significant and frankly often unnecessary. Freeing business and corporations from unneeded burdens of over regulatory control would be a major leap towards improving our industrial competitiveness in the global marketplace.

Perhaps an over simplification. Perhaps not. At any rate RN USA leaves you with a question... Haven't we been thinking inside the same box for way to many years?


  1. FWIW, I like your plan, even though I don't think it would have any chance of being passed. On the other hand, it's very similar to my proposal, although in my plan it's implemented as a cap on taxation, instead of replacement to the existing tax structure. I feel a cap would be much easier to pass, much more palatable (less uncertainty than throwing out all of the existing system), and ultimately have the same effect. My 2c.

  2. Sounds like a good plan to me. My current favorite would be the Fair Tax after repeal of the 16th Ammendment.

    Kudos to any GOP candidate with a serious plan for tax reform.

  3. Great plan, and of course a vast improvement on the current system. A couple of questions.
    1. Why not the same marginal rate for all income brackets? I think that would be fairer.
    2. Why not the same rate for individual, corporate, and gains? A complaint is that the wealthy avoid taxes by arbitrage between those rates. I think that complaint is legitimate.
    3. What level of spending cuts are envisioned?

  4. As bad as the tax system is, the real problem is still "SPENDING"!
    And here is a
    Prime example...

  5. I like any plan that is simpler and straight forward, plus requires 75% vote to change. I am all for fair tax, flat tax, or a straight tax. I am sick of progressive taxes and I know that it will take baby steps to make real progress.

    I also think that we need to take a chainsaw to the federal budget and start lopping off huge chunks. We need to start with those chunks the Constitution doesn't mention and were created in the last 100 years.

    We can actually make a difference if we kill some sacred cows and show how things can be different and better. Just taking about reform doesn't cut it because people are always scared of change, so you have to show them how the change will positively affect them and then as you enact each bit of change show them the positive results.

    We have had zero positives out of Washington for a long time, so no one trusts anything that happens there. That is why some many people are fighting any change because the devil you know is better than the unknown.

  6. I love it. The average family pays half or more of their income in taxes of some sort. Enough is enough. http://memphiscpafirm.com


Commenting here is a privilege, not a right. Comments that contain cursing or insults and those failing to add to the discussion will be summarily deleted.