Peter Rush of New York wrote an interesting guest editorial in
which he claimed the U.S. needs to adopt a flat income tax. He says
the U.S. deficit is caused by excess spending, not lack of income.
But most of his article was about income.
Peter Rush of New York wrote an interesting guest editorial in which he claimed the U.S. needs to adopt a flat income tax. He says the U.S. deficit is caused by excess spending, not lack of income. But most of his article was about income.
A flat tax might (or might not) be a good idea, but how will it help solve the spending problem? Mr. Rush says a flat tax will make paying federal income taxes much simpler. He says the 2010 U.S. tax revenue was $2.1 trillion.
Mr. Rush didn’t say it, but only $1.1 trillion of the 2010 U.S. federal income was from income tax – $865 billion was from social taxes like Social Security and Medicare; $132 billion was from ad-valorem taxes such as excise taxes, transportation taxes, and customs duties. (Source: www.usrevenue.com)
He also didn’t say it but U.S. federal expenditures were $3.5 trillion in 2010. (Source: www.usrevenue.com) Is adoption of a flat tax going to make up the missing $1.4 trillion?
Mr. Rush said a flat tax would be fair to lower income people because there would be enough built in deductions for them to avoid excessive taxation. We already have that in our present tax system: 47% of all households in the U.S. pay no federal income tax. (Source: CNNmoney.com)
Mr. Rush says a number of other countries around the world, including former members of the Soviet Union are adopting a flat tax. That is not a sterling recommendation.
It would be great if a flat tax would solve the U.S. spending problem, but Mr. Rush didn’t produce any evidence to prove it would.
Duane Linstrom, Gilroy