Would you vote for jmfcst's tweak of Cain's 999 plan

[angus]

Short version:  

IRS is dead, no need to file any kind of individual federal tax return (unless you have investment income)....investments are taxed as same as income, but even income below poverty line is taxed, there are no exemptions and no deductions...corporate tax is identical to Cain's...9% VAT excludes rent, food, and used clothing so that the poor don't have to pay VAT for basic necessities, and thus makes the jmfcst version of 999 PROGRESSIVE

Maybe.  The current federal budget seems to be larger than the amount that this would generate.  Do you have a good estimate of the total amount of revenue that this would bring in 2011, or in 2010?  My wild guess is just over $1.5B, which is not enough to sustain our current programs, but I could be way off.  Bottom line is that I will support a flat tax if it draws enough revenue to avoid deficit spending.  

[angus]

So, I would think it would come to between 20 and 23 percent of GDP

Okay, I read your post and there's not much detail about where the 20-23% comes from, but you seem to have it in your head as a reasonable guess, and your outline for a rough estimate seems good, so let's accept that for the sake of argument.  That would be 0.2 X 14 triillion = 2.8 trillion.  Current spending is just over 3 trillion, so that's not too bad, especially if we're going to trim spending in the next congress.

But I still think a few more adjustments are in order.  I like the idea of a flat tax on income, but I really don't like the idea of a national sales tax for two reasons.  First, as has been pointed out the percent of a family's budget used to consume goes way up as income goes down, so people who can least afford to pay the sales tax are hit hardest.  That affects all of us since we end up adjusting the welfare/medicare rolls to even that out.  Second, as Michelle Bachmann and others have suggested, it institutes a new tax, and if the past is any guide to the future, then we can expect that tax to increase over time.  Eventually you can imagine paying a 20% sales tax in addition to income taxes.

If we lose the national sales tax, and decrease the corporate tax in order to encourage job creation, and increase the national flat income tax proportionately to make it up, I'd be on board.  Maybe something like

income:  flat 18% for everyone
corporate:  flat 5%
sales:  none

That would still generate 3 billion or so, and you'd have an easier time selling it to both parties in congress. 

[angus]

Gets a little tricky.  We could avoid taxing subways and buses, but still tax fuel and private cars.  This would also have the effect of encouraging public mass transit.  But "fairness" would be an issue.  If you live in Wyoming, there probably isn't a subway stop near your workplace or your house, so the car you drive is analogous to the subway that a person commuting from Brooklyn to New York would take. 


I think the goal of simplifying the tax code has merit, but already we're seeing that no code is simple.