Would a Flat Tax Be More Fair? | 5 Minute Video

What would happen if there was just one tax rate for most Americans? Would that be fair? Could it even work? Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, explains.

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Script:

The American Revolution started as a tax revolt – over a single tax on tea! Now look at us. It seems like everything we do is taxed.

The system behind these taxes is a bureaucratic monstrosity; a dead weight on the economy. And it erodes our trust in the government that's taxing us. If you have enough lawyers, lobbyists, and loopholes at your disposal maybe you can game the system. That's fine for big corporations and wealthy individuals, but what about the small business owner or the middle class taxpayer? He just has to shut up and pay up. Nothing better illustrates the disaster that our tax system has become than the mother of all taxes: the federal income tax code. This tax alone, with all its attendant rulings and interpretations, is estimated to be about 10 million words – and rising!

Several years ago, Money magazine took a hypothetical family's finances and gave the numbers to 46 tax preparers. Forty-six different estimates came back. In some cases those differences ran into the thousands of dollars of what the family owed. This from experts who are considered to be the best in the business. But the taxes themselves are only part of the cost of this toxic code. There's also the cost of compliance – the time, money and effort it takes Americans to prepare their taxes.

A George Mason University study puts the annual cost of compliance as high as $378 billion and the total annual economic cost (including work hours) at more than $600 billion. Again, these are annual costs – as in every year! That's a lot of money that could be used in more productive ways – creating new products, new services, new medical devices, new cures for diseases.

Clearly, the time has come to drive a stake through the heart of this tax monster. So, what should be done? Like most things, the best solution is the most simple: A single flat tax with no deductions, except for a deduction for each adult and for each child. Fill out a sheet of paper or key in a few numbers on your computer, and you're done. This one change would not only make every citizen's life easier, it would also transform government, our economy, and our society by ending the complexity that gives bureaucrats and politicians so much power. They have power because they're the ones who dole out the tax favors.

It wasn't always this way. There was a time when corporations primarily lobbied Washington to keep government out of their businesses. That has changed. In the words of The Atlantic, “The evolution of business lobbying from a sparse reactive force into a ubiquitous and increasingly proactive one is among the most important transformations in American politics over the last 40 years.”

This favor-seeking is centered on getting special treatment and tax breaks. A flat tax will help us begin to scale back that special interest-loving, crony-capitalist big government that we all complain about. Everyone would pay less – not only in taxes, but also in compliance. Investment and job creation would skyrocket. We'd experience a recovery that would grow the tax base and – irony of ironies – ultimately generate more revenue for government. I go into this in much greater detail in my book, Reviving America, but here, in essence, is how it works.

[Akiraspin]

A nation cannot tax itself into prosperity.

[martinharris]

This is pure common sense. No wonder it hasn't been implemented.
One day maybe.

[MrDDiRusso]

They make the taxes so complicated so no one realizes how much they're being shafted.

[fcoram]

We should ALL pay the same flat tax percentage the rich and the poor period. Different amounts but the same percentage. If we all share the same liberties and freedoms of this country we should all bear the same responsibility.

[gyorgynemes]

This is NOT an argument for a Flat Tax!

My only, and really big problem with the video, that it is not an argument for flat tax. Flat income tax is, when EVERYONE pays an equal percentage of their income. (Like we have in Hungary.(15%))

In this video Steve Forbes argues for a tax system with 2 brackets. One above $52800 annual income (17%), and one below it (0%). That's a progressive income tax system by definition.

This video is actually an argument for the simplification of the tax code, and not for the flat tax. As in the last few minutes Steve Forbes admits, that the simplification can be achieved by a progressive income tax system, like one he proposed.

Calling this video ''The Case for a Flat Tax'' is wrong, because people might use these arguments to defend the flat tax. Most importantly the video admits to the principle of progressive taxation, that poor people should pay a smaller portion of their income than rich people.
If you want to defend the flat tax you have to argue, that EVERYONE (including poor people and the very rich) should pay the same percentage of their income.

Util this happens PragerU should rename this video: The Case for simplifying the Tax Code. I know that, it isn't as catchy, but at least i would be accurate.

[agentbubbles]

I say we jump onto ships and throw chests of tea off of ships again.
#BostonTeaParty2019

[justaman]

MERRY CHRISTMAS AMERICA!!!!



With love, from Italy

[OttoTheSmartass]

"The problem with other people's money is that you eventually run out of socialism."

- Margaret Thatcher

[whygoogle]

I've been thinking about this for years... 10% tax across the board.

[vjoecr]

We said no taxation without representation. it wasn't until King George tried to seize our firearms that we finally declared independence.

[MichaelJones-gwsg]

No one should ever have to give more than 10% of their income to the Federal Government, but EVERYONE should have to pay 10%. 17% is too high!

[OdeeOz]

It would make figuring personal taxes out a lot easier. Fair or not, a flat tax would demand the Government *_Keep a balanced budget._* Otherwise it's a futile exercise

[AltKuyperian]

Post this again, this was done 4 years ago and not enough people have heard of it, it’s time to push harder

[williamdowden]

Have been a fan of this since you first proposed it when you ran for office. I can see why the democrats and even some of the republicans hate this. If you dry up their revenue stream they would lose their power.

[MikematicOnUTube]

Wasn't the Boston Tea Party a revolt of several taxes, not just the one on sugar and tea?

[hamnchee]

I like the idea of a flat tax, but 17% is TOO DAMN HIGH.

[deaconblooze]

And when you advocate for this as a presidential candidate, you end up getting smeared by both sides of the aisle.

[yardmasterswealtheducation]

I am so glad I found PragerU. I have always been a fan of the idea of a flat tax rate. A few years ago, I finally "got" the concept of the standard deduction. Now, your deduction for each adult and child finishes the package! ThankU so much!

[filipkarwowski]

Amend the constitution and establish:

-Flat tax
-No deficit

This makes the whole country united. We all pay the same proportion of our income to keep the government running. We want some new government program? ALL of our taxes are raised. And no deficit. We spend within our limit and we don’t inherit a previous generation’s overspending, nor do we leave future generations with our debt.

[yukonjack]

17% flat tax rate would be wonderful! The trick would be keeping politicians from ratcheting it up over time.