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The Flat Tax, spearhead of the necessary tax reform?
As opposed to the progressive tax, the “flat tax” is proportional, that is to say it applies the same tax rate to all taxable income. It thus puts an end to all discrimination by income, grouping or composition of the tax household. The flat tax is a daily subject of discussion in the United States, in particular to simplify the current old tax code; it has already come into force in countries such as Russia, Estonia and Slovakia. The debate opposes, on the one hand, the defenders of the principle, who explain that a man who works (and therefore perhaps earns) ten times more than his neighbor does not have to pay a higher tax rate. , especially since he will already pay ten times more taxes with the flat tax. Conversely, critics of the principle think that the middle and poor classes should not suffer a tax rate as heavy as the highest incomes. 11/05/2009, IREF
The Flat Tax, the project of which is presented by Robert E. Hall and Alvin Rabuschka, is a single-rate tax consisting of proportionally taxing all taxpayers, individuals and businesses, regardless of the source of their income or their amount. The tax declaration would fit on a postcard.
The two authors, professors at Stanford University and researchers at the Hoover Foundation, base their demonstration on several observations. First, as it exists today, the U.S. federal income tax is a complete disaster because it is inefficient, inequitable, complex, and incomprehensible. It encourages tax evasion and evasion. The federal tax that Jimmy Carter called “a disgrace to the human race” is of a complexity that takes up more than 6,000 pages gathered in the IRS Tax Code (the equivalent of our DGI). The US IRS issues more than 500 tax forms each year with explanations for taxpayers. Three publishing houses are called upon every year to edit all this paperwork. Approximately 10 billion pages are therefore sent every year to American taxpayers.
The costs of collecting this tax are extremely high as they are estimated at around 65% of the amounts collected, or $400 billion. These are direct costs. But taxpayers – individuals and businesses – spend a lot of time filling out the forms: 46 hours (two days) on average. This cost is difficult to quantify but the authors estimate it at more than $100 billion per year (this also includes expenses swallowed up by tax advisors). Added to this are tax evasion and tax avoidance (tax loopholes) fueled by the incredible complexity of taxes. It is estimated that more than 18% of the amount of tax owed by taxpayers is not collected by the tax authorities.
In the United States, tax loopholes are extremely numerous. Some are very useful and contribute to the development of the American economy and civil society: deductions for foundations, think tanks, charities, universities, hospitals, etc. But many tax exemptions are completely wacky and their cost is estimated at 250 billion dollars. Thousands of forms and regulations will disappear thanks to this flat rate tax. They will be replaced by two forms the size of a postcard. The authors show very clearly that the “flat tax” is also the fairest tax because it affects all people but the richest will pay more tax than the less wealthy. Finally, the “flat tax” would be an excellent tool for economic growth. And also in the service of the State. All the countries – more than twenty in the world – which have implemented it have seen their tax revenues increase.
This overwhelming demonstration is in line with our theses. The only valid tax would be a single, flat-rate, direct, transparent and controllable tax. If this tax is a percentage it would not benefit the rich. The question is whether VAT would be dismantled. And if tax resources would be open to civil society organizations.
Any other form of imposition is necessarily unintelligent since it seeks to influence the behavior of social actors without knowing anything about what determines said behavior. Most often, the complex rules put in place by politicians and bureaucrats contradict or cancel each other out or are circumvented by the actors.
As for expenses, tax revenue should be open to all organizations pursuing the common good within the framework of the development of civil society, and not be reserved for the State alone. We can very well envisage a reduction in this State’s expenditure via the privatization or societalization of many of its functions, including sovereign ones, and we can manage State services much better, so as to produce better services with less money. means.
As opposed to the progressive tax, the “flat tax” is proportional, that is to say it applies the same tax rate to all taxable income. It thus puts an end to all discrimination by income, grouping or composition of the tax household. The flat tax is a daily subject of discussion in the United States, in particular to simplify the current old tax code; it has already come into force in countries such as Russia, Estonia and Slovakia. The debate opposes, on the one hand, the defenders of the principle, who explain that a man who works (and therefore perhaps earns) ten times more than his neighbor does not have to pay a higher tax rate. , especially since he will already pay ten times more taxes with the flat tax. Conversely, critics of the principle think that the middle and poor classes should not suffer a tax rate as heavy as the highest incomes. 11/05/2009, IREF
The two authors, professors at Stanford University and researchers at the Hoover Foundation, base their demonstration on several observations. First, as it exists today, the U.S. federal income tax is a complete disaster because it is inefficient, inequitable, complex, and incomprehensible. It encourages tax evasion and evasion. The federal tax that Jimmy Carter called “a disgrace to the human race” is of a complexity that takes up more than 6,000 pages gathered in the IRS Tax Code (the equivalent of our DGI). The US IRS issues more than 500 tax forms each year with explanations for taxpayers. Three publishing houses are called upon every year to edit all this paperwork. Approximately 10 billion pages are therefore sent every year to American taxpayers.
The costs of collecting this tax are extremely high as they are estimated at around 65% of the amounts collected, or $400 billion. These are direct costs. But taxpayers – individuals and businesses – spend a lot of time filling out the forms: 46 hours (two days) on average. This cost is difficult to quantify but the authors estimate it at more than $100 billion per year (this also includes expenses swallowed up by tax advisors). Added to this are tax evasion and tax avoidance (tax loopholes) fueled by the incredible complexity of taxes. It is estimated that more than 18% of the amount of tax owed by taxpayers is not collected by the tax authorities.
