68 of 85 people found the following review helpful:
5.0 out of 5 stars
Great proposal with a lot of helpful information to help you make an impact for tax reform!, July 25, 2005
This review is from: Flat Tax Revolution: Using a Postcard to Abolish the IRS (Hardcover)
Every person who is concerned about taxes should read this concise and clearly written book. Steve Forbes has put forward a plan that will help every one of us by making our economy more efficient, make competition in the marketplace more even and fair (because being well connected with lobbyists would lose its power to get you a special break), and would make our representatives more directly accountable for what they spend because it would be more clear to each of us what it is we pay into the Washington D.C. sinkhole.
Every now and again it is essential to not just overhaul the tax code, but to wipe it out completely and start over. This happens because those whose job it is to spend the money eventually realize that the more money they have to spend the greater their power. They grant the money to those who support them, to retain popularity with their constituents, and to make those who receive payments beholden to them. They learn to collect the money as indirectly as possible so there is no general opposition to this or that small increase while there is a very vocal special interest group that wants the payment and hires lobbyists and supports the campaign costs of those who get them those payments.
The whole code becomes impenetrable with exceptions, loopholes, and one-offs. For example, Mr. Forbes points out a couple of times that Starbucks, your local caffeine purveyor, has gotten Congress to grant it a special exemption as a MANUFACTURER so it can get a special tax break on the grounds (sorry) that it grinds coffee beans. Right. There are thousands of these special favors built into the code. How does that help the consumer? Starbucks should have to compete against every other coffee company on an equal footing and that will get the customers the best prices, products, and services.
This optimistic book takes us on a quick trip through the present monstrosity, the benefits to America that a Flat Tax will bring, compares it to a national sales tax, shows the experience of other countries who have a flat tax, and then gives the reader the information he or she needs to go out and make a difference to get this done. Mr. Forbes provides contact information for contacting your elected officials in Washington and some leading organizations concerned with tax reform. He provides contact information for national radio shows and other information to help you get up to speed about what else is being offered in the name of tax reform. Other flat tax proposals are also compared. Mr. Forbes also talks about how a Flat Tax combined with Health Savings Accounts will free most of us from being bound to our elected officials and the threat of becoming devastated if a job change is forced on you.
This is a terrific book and reads like fresh air breathes. I hope you will read it, tell your friends about it, and that it will generate a great deal of INFORMED discussion rather than the deafening roar of those who benefit from the present system and don't want it changed so they simply shout down the voices for change. Remember, the buggy whip makers, horse breeders, wagon makers, and many other industries all went away and the workers found more efficient and often more gainful employment. Deploying intelligent and literate workers who now argue over interpretations of the volumes of the tax law into more productive work will not only help them, it will help you.
Let's do it!
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126 of 165 people found the following review helpful:
3.0 out of 5 stars
Good start but the final plan is neither flat nor fair, September 1, 2005
This review is from: Flat Tax Revolution: Using a Postcard to Abolish the IRS (Hardcover)
This 'simple' tax seems pretty complicated. Let me see if I get this right.
Forbes inadvertently calls for two federal income tax rates: a progressive tax on income (after personal deductions) and continuation of the regressive social security tax, also a federal tax on income. To see the problem, let's take a look at the prototypical (if also increasingly rare) two-parent, two-child family. Under Forbes's plan, their federal income tax rate changes, depending on the family's income. He starts by proposing exemptions, deductions, and tax credits, undercutting his claims that this is a "simple" flat tax and his argument that the whole point of a flat tax is to eliminate personal deductions, exemptions and the like. Then, below $46,165 a year, this family's effective federal income tax rate is zero. At an annual family income of $92,330, the effective or real tax rate it is half of Forbes' nominal 17% `flat' rate, because the family pays no taxes on the first $46, 165. And at $138,495, the rate is two-thirds of Forbes' nominal rate. You get the picture. The rate approaches the nominal 17% flat rate Forbes proposes, but never reaches it. This is called calculus, or approaching the nominal rate asymptotically. But it is not a flat tax. It is flat on the margin, but only for those who pay taxes, and with a $46,135 cut off, many families would pay no Forbes federal income taxes.
But wait! The Forbes `flat' tax isn't really fair either. On page sixty, right after Forbes proposes his "flat" 17% federal income tax rate and those exemptions and deductions), he decides to leave social security taxes out of the equation ("It does not supplant Medicare and social security taxes..."). Social security taxes are federal taxes on income, no matter how you slice it, lock-box it, or play with it. It is a federal tax on income. Back to that prototypic, four-person American family. In addition to Forbes' flat tax, this family will pay about 15% (including the "employer's share) on all of their income up to $90,000 (as of 2005), at which point basic social security taxes stop and the rate on income drops to about 3%.
So we have one progressive tax and another regressive tax. Put these two tax plans together - which is exactly what Forbes perhaps inadvertently does on page sixty - and you have the worst of all possible worlds, a middle class nightmare, Going back to that prototypical family and at $46,165 you add together rates of 0% (Forbes' "flat" rate) and 15% (social security, Medicare, Medicaid). Then they pay 17% plus 15% (a 32% marginal rate) on the income between $46,165 and $90,000. Above $90,000, the social security tax disappears, so the marginal rate drops back to about 20% for all income above $90,000. Worse, if this is a two-income family, with both adults earning $90,000, the social security tax on the family persists up through $180,000 in income. And no one ever pays the 17% tax rate on income!
The Forbes plan would also encourage employees to seek "non-income" perks, like health benefits, corporate apartments, company cars, uniforms, subsidized cafeterias, club memberships, and other benefits paid by the employer. Forbes also too quickly dismisses a national sales tax as regressive while ignoring the regressive social security tax. In fact, some targeted "sin" taxes on consumption are effective and -- at high enough rates -- able to dampen demand on consumption based on bad habits, e.g. smoking. Regressive taxes on unproductive or dysfunctional behaviors are laudable or at least worth considering. Some argue these sin taxes to be paternalistic, maternalistic, or simply moralistic without realizing that all tax plans have these three elements. Is taxing income any more or less moral or maternalistic than taxing consumption? Forbes' plan could perhaps fit on one small card because something significant is left off the card but not off your tax bill!
Am I missing something?
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23 of 28 people found the following review helpful:
5.0 out of 5 stars
Flat Tax Now!!, July 18, 2005
This review is from: Flat Tax Revolution: Using a Postcard to Abolish the IRS (Hardcover)
Just read Steve Forbes' new book, Flat Tax Revolution: Using a Postcard to Abolish the IRS. What an idea! The Washington politicians, H&R Block, tax lawyers, theIRS, and lobbyists will hate it...they will be out of business! The book is a GREAT read, written for non-economists, non-nerds. Steve shows how this can work in America, but he also shows how it is already working in a bunch of other countries. He also brilliantly demolishes all those phony arguments that tax-lovers use against it. Good Job Steve!!
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