68 of 85 people found the following review helpful
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!
24 of 29 people found the following review helpful
on July 18, 2005
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!!
127 of 166 people found the following review helpful
on September 1, 2005
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?
12 of 14 people found the following review helpful
on April 15, 2008
The Forbes plan for tax reform is far less than ideal. It is not really a flat and simple tax, just a flatter and simpler tax. That being said, his system is preferable to the current monstrosity enforced by the IRS. Ideally, we should scrap the tax code and established a low flat tax rate. My ideal solution is not going to happen at this time.
Our first priority should be to slash Federal spending. With Federal spending as high as it is there is no chance of real tax reform. High levels of spending require high levels of taxation. With high levels of taxation, people are going to lobby for tax exemptions, so we will likely be stuck with a complex income tax code.
Forbes and other critics of big government should focus on restraining and then cutting growth in Federal spending. Then, after the spending problem is under control, we can talk about real tax reform. In the mean time, we might as well discuss the merits of more radical and ideal tax reform. In other words, Forbes advocates too little tax reform too soon. We should wait for an opportunity to really kill the IRS and the tax compliance industry. The IRS is a fundamentally evil organization, and the tax compliance industry is parasitic. Their time will come, and decent people who oppose them should be patient.
18 of 23 people found the following review helpful
on August 1, 2005
While the skeptics continue to say that the Flat Tax makes the rich richer and the poor poorer, Steve Forbes has proven once again that his Flat Tax system (because there are many versions of the flat tax) can not only make our economy prosper once again, but that it improves the economic status of ALL Americans.
People are too quick to say that the Flat Tax will make the poor poorer. Put simply, the Forbes Flat Tax (or FFT) gives tax credits to each individual in a family. A family of four with an income of $46,000 (approximately) will pay no taxes. THAT'S RIGHT, NO TAXES. Let me say that one more time for those who didn't get it, NO TAXES! If you consider the amount of taxes they pay under the current tax code, then yes, UNDER THE FFT THEY ARE BETTER OFF!! I don't need to tell you the number of American families who make less than that; you're eliminating taxes all together for that income bracket! For the family in this example, the amount in dollars that they pay in taxes becomes new income and who doesn't want to make more money?
There are basic economic theories that show that the more people will make, the more they'll spend, and the more they spend, the more the economy will grow. Any economist will tell you this. If you relate back to the family of four I mentioned in the previous paragraph, now making more money under the FFT, you know that they will spend more. Be it at the supermarket, or on a vacation, or even that they plan for the future and invest their newly saved money, they will be spending more. When you multiply this by each American household, (because everyone will be making more) you give an enormous boost to the economy leading to prosperity. This creates jobs, creates new business, and more money for everyone. I know it's hard to believe, but in the long run, a stronger economy even REDUCES THE DEFICIT! With growing economies such as China's, India's, and other countries that once were part of the third world, the United States can not afford to stall! Yes, the country is doing pretty well today, but it's no time to sit down, relax, and get overtaken. There is NO PRIZE FOR SECOND PLACE!
It's the critics who say that it's unfair for the rich to pay the same amount of taxes as the lower income families. There is no other reason why they don't think everyone should pay the same rate. But in reality, under the FFT the wealthy do pay more. 17% of $10 million is a lot more than 17% of $60,000. In fact, the difference is $1,689,800. And this doesn't even consider the amount of people who would NO LONGER have to pay taxes under the FFT.
On top of all these savings and economic prosperity, the FFT simplifies our tax code. So much so, that a 10 year old with basic math skills could fill your family's income tax return. No more accountant to pay to do your taxes (again, more savings to you) and no more hassle to fill out forms. It would take you 5 minutes and one postcard! When you make it this simple, who wouldn't file their taxes on January 1? When you make it this simple, WHO WOULDN'T file their taxes at all? It reduces the amount of crooks who don't file a return and the amount of corporations who cheat regular Americans like you and me. You'd even get your refund faster. No more lines at the post office on April 15th. The IRS wouldn't have to employ 1 million people to review your returns, reducing government spending which encourages economic growth.
HOW CAN THIS NOT IMPROVE THE LIFE OF EVERY AMERICAN?
In short, and simply put, the FFT:
- ELIMINATES INCOME TAXES for a large portion of Americans who currently pay taxes under the current tax code
- INCREASES INCOME for ALL AMERICANS by reducing taxes
- INCREASED ECONOMIC GROWTH in America
- INCREASES JOBS
- INCREASES GDP
- REDUCES THE DEFICT
- REDUCES GOVERNMENT SPENDING
- REDUCES THE AMOUNT OF CROOKS who cheat on their returns
- SIMPLIFIES the tax code
Mr. Forbes is so convinced you'll like his system better, that he'll give you the choice. Do it the regular old inconvenient way, or file your return on a post card. We'll see which one you opt for!
Steve Forbes is one step ahead of all of us. Every four years we listen to politicians fighting to be our President debating these exact issues when there is one simple solution. When Columbus approached his peers and told them the earth was round, everyone looked at him like he was crazy. In the end, he turned out to be right. You may look at Steve Forbes as a fool who doesn't know what he's talking about, but in dew time the history books will show that he was dead on!
The Forbes Flat Tax is one small step for a man, but one giant leap for mankind!
Buy the book, call your congressman, and make a difference! Let's take America's economy into our own hands and change history. It's only a matter of time before the Forbes Flat Tax is standard. At that time, you may want to be the proud owner of his book and be able to tell your friends:
"I told you so!"
19 of 25 people found the following review helpful
on July 19, 2005
Steve Forbes plan is a dream. A coworker got a copy from her dad, had heard me complain about my taxes this past year, and said maybe I would find it interesting. You'd think the book would by dry, but it was actually really readible. I paid $500 to get my stupid taxes done this year since, as a New York commuter, I live and work in 2 different states, complicating things. Then my employer sends me a letter the day after I filed (a week early because I was trying to be responsible) and says they forgot one thing. And I had to pay to have it fixed. $650 to get my 2004 taxes done.
I could have taken a vacation! Fire the DC jerks who run the IRS, save us all time and money, and Mr. Forbes gives examples of how it's working elsewhere. Everyone should read this book and start badgering their congressmen and anyone else responsible for the nightmare that is tax season.
14 of 18 people found the following review helpful
on July 25, 2005
Forbes's tax system is a step in the right direction. As he demonstrates in his book, lower taxes actually increase government revenue. Any Economics 101 professor can show you how this is possible (less taxes means fewer deadweight losses). Lower taxes make a more vibrant economy, which grows to support more government income. Even if there was no economic benefit to anyone, Forbes's system at least gets rid of the terrible nightmare that is our current tax code.
19 of 25 people found the following review helpful
on July 19, 2005
This is a great, easy read of a subject I hate--TAXES! The book makes perfect sense, hopefully those idiots in Washington, DC will read it and learn something! We need this type of tax system, where the more you make the more you pay, so it's fair to all of us, not like the current system that favors the rich and the lawyers!
18 of 24 people found the following review helpful
on July 19, 2005
I found this book insightful, an easy read. I don't usually pick up books on the subject of taxes but was drawn to it due to Mr. Forbes' excellent writing in his "Fact and Comment" column in Forbes magazine. If you want to understand what needs to be done in the future, this is a must read!
15 of 20 people found the following review helpful
on September 26, 2005
Those who have paid attention to Mr. Forbes' ideas for a while will appreciate the detail provided in this book. Those who are new to the flat tax concept may well have trouble with the clarity and logic of the idea. In either case, one leaves wondering what it would take for our legislators to take the need for tax reform seriously. The current system is impossible to defend even if one did not have the benefit of reading this book. The "Flat Tax Revolution" provides the information to support an argument that true tax reform is not only due, it is overdue.
Anyone who is even mildly interested in taming the monster that is our current federal tax code needs this book.