Flat Tax?

Henry C.K. Liu hliu at mindspring.com
Fri Jan 22 15:52:18 PST 1999


The reason for the complexity in determining the taxable income is in claiming the deductions, not in determining gross income. The use of the income tax to direct economic activities has been largely reduced by the limitation on deductabilities and the drop in the maximum rate (from 90% to 33%). This is why many tax-driven investments and philanthropies are out of business. It is generally acknowledged that the use of the tax code to direct economic policy is not very efficient and fraught with unforeseen consequences.

Henry C.K. Liu

Steve Bruns wrote:


> What puzzles me is that most people I come in contact with think a flat tax will
> greatly simplify their form 1040. It looks like the complexity is in determining
> what is exactly income, not the arithmetic in figuring the tax after making that
> determination. Besides, isn't the primary purpose of the tax code to direct
> economic activity rather than raise revenue? That ain't a rhetorical question.
>
> Steve Bruns
>
> Doug Henwood wrote:
>
> > Daniel wrote:
> >
> > >That's pretty much what I used to think. But then I started hearing Jerry
> > >Brown talking about a flat tax, and I began to see that there are many ways
> > >of writing a flat tax. Just as there could be many ways of writing a VAT,
> > >and when I set my own mind to it, I had all kinds of fun deciding what sort
> > >of percentages to apply to minks and mercedes.
> >
> >
> > Oh heavens no. The last thing an "expert" needs is for people to shut their
> > mouths.
> >
> > Doug



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