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The Flat Tax: Why It Won't Work for America

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The idea that the Flat tax can't work for America is indefensible. Europe has a VAT tax, many states have sales taxes, and the US functioned with revenue tariffs for much of its history. There are many ways to finance the operations of government, and no one method is indispensable. Some methods are less onerous than others.

The Federal income tax code is needlessly complex. There is no practical need for the many thousands of pages of tax regulations and exemptions. These measures are in place to keep the tax compliance industry intact. Hicko is a member of this industry. Hicko and his peers would lose their jobs if we adopted a flat tax. Hicko defends the tax code for personal reasons, and without valid arguments.

Scrapping the tax code makes sense even from the perspective of a social democrat or welfare state liberal. There are far simpler and more effective ways of transferring wealth from rich too poor (not that I favor such things). The poor can be exempted from income taxes with one (and only one) standard exemption, of lets say 10,000$. A single tax rate single exemption system would save productive members of society the bother and expense of dealing with our current tax code. A single tax rate single exemption system would also render parasites like Hicko unemployed- all the more reason to do it...

Not only would a flat tax work, it would improve economic conditions and be more just and fair. The economic case for the flat tax is simple and correct: heavy complex tax systems cause much economic waste and hinder economic development. There is a strong moral case for the flat tax too: Americans should be equal before the law, and we should not be leeched off by CPA's. Hicko is an apologist for an inefficient and immoral system, plain and simple.

Hicko defense the current tax system of USA in a very cynical and rough way. The book takes you through in his myths based on the proposed new flat tax system by Alvin Rabushka, Dick Armey, Robert Hall, Robert Eisner and Herbert Stein. However, you will have moments during reading when you can laugh about his viewpoints of defense. Before you read the book, it might be better being at least a bit familiar with some other books, like: Robert Hall, Alvin Rabushka, The Flat Tax; and/or Dick Armey, The Flat Tax; and/or ISBN 0-8447-3987-1 Fairness and Efficiency in the Flat Tax. Just to mention some. Me personally, I would recommend to read the book of Scott E. Hicko, because it is always good to see opposite viewpoints as well, in order to evaluate more correctly. You do will have fun.

Throughout this book the same thought kept occuring in my brain: The author, Hicko, is an accountant and tax preparer by trade. Of course he doesn't want a flat tax. His profession is the only one that loses under a simple tax code. This book is just a bunch of class warfare dribble that went out of style in 1975. Forbes' book, Flat Tax Revolution, is much better.

I've leafed through this book, and can find no description of the proposed tax law he is attacking. There is no index. I've typed "Rabushka" and "Hall" into Amazon's Search in this Book engine, and come up empty-handed. I find Dick Armey's name, but again no specifics about just what the the Hon. Mr. Armey advocates.

In flat taxation as in everything else, the Devil's in the Details. Once you get your head around the flat tax a la Hall and Rabushka (called the Simple Tax), all other competing flat tax proposals come off as small beer. This is not to say that the Simple Tax cannot be much improved. Here's two major changes:
* Replace the personal allowances with a refundable personal credit of at least $2500 per year. This turns the Simple Tax into a variant of the negative income tax.
* Raise the flat tax rate to something like 27-30%, then let employers credit FICA tax payments against Simple Tax liabilities. This simple step goes a fair way towards addressing the inequities Hicko complains of.

The Simple Tax modified as I propose would relieve all individuals who are not self-employed from having to think about taxes. All taxes owed on wages, interest, dividends would be withheld by the payer, and amounts received would be free of tax.
Hence compliance costs for most households would go to zero. Most tax CPAs would have to change careers; most H&RBlock offices would close.

More generally, a modification of the Simple Tax is not subject to most of the objections Hicko raises against flat taxes in general.

A book of even greater myths.
He misses the fundamental flaw in the entire plot.
America is not a complicated economy. It may be many faceted which is very different from complicated. What is complicated is an organization that spends its time looking for never ending ways to justify taking money from its productive citizens. Calculating and grading every profitable venture in a myriad of complicated ways to invent and justify ploys to squeeze out more and more taxes. It is a marvellous game with a cast of tens of thousands uselessly employed in a cat and mouse game that could well be employed in a proper job where there was something to market and the end of a day's work. Where their activity made the GDP greater at the end of the day than it was in the morning.
The less people involved in collecting taxes the better for the country. The simpler the system the less wasted labor in administering it the better.
The true fact is the IRS has only ever got more complicated, employed more people, made more rules, got more difficult to follow and created more accountants jobs as people in despair turn to specialists in almost a vain effort to comply with their never ending changes in rules. And you think you can fix this with a bit of fiddling at the edges? Dream on.
No one has to date despite the massive efforts than have been put into it trying. As I said you can't fix something that is fundamentally flawed in the first place. Endlessly figuring out ways of taking money from the producers that have to give to the unproductive have nots is about as communistic as they come.
I hope your red card is fully paid up Mr. Hicko.

For almost 150 years America thrived and expanded without an income tax.

Our problem now is that we have an income tax. Scott Hicko is discussing what? Another income tax!

The difference between our graduated income tax and a flat income tax is the difference between being tortured to death slowly versus being killed quickly with a shot to the head. I guess I'd take the shot, but I'd rather have a third option of keeping my life and living it freely.

You best bet right now is to use Amazon to gather as much about income taxation as you can. I highly recommend "Your Money Or Your Life" by Sheldon Richman and "Why Government Doesn't Work" by Harry Browne.

The enforcement of any income requires that the government pry into you private life. I want to end that, and enter the new millenium as a much more free country.

Scott Hicko's work to expose the lies and fraud of the widely discussed flat tax ideas coming from the Right is a breath of fresh air in the stifling and rancid air of Bush era politics. Even though it responds to Dick Armey's doomed plan of the mid-90's, you can be sure the Flat Tax debate will come roaring back as the Right, led by the Bush/Cheney/Rove triumvirate, continues its class war against the middle and lower classes.

Other reviewers have criticised this book. One reviewer mentions Alvin Rabushka's work on the flat tax system but Rabushka himself conceeded in his book that the flat tax would disproportionately burden the lower classes! The reviewers offer no substantiation that Hicko's book is factually incorrect. The author has 25 years of experience as a CPA and has done battle with the IRS for years. He knows the tax codes inside and out and he is adept at straightforward calculations about federal revenue. He makes very clear the case that the people with the money and power in this country are doing everything in their power to pass more and more of the burden to the lower and middle classes. It's not rocket science. It's math. The Right's usual approach when they try to shove this sort of tax concept down our throats is to cloak it in the classic language of "trickle-down," to convince us that all of these changes will lead to fantastic job growth and new prosperity for the country. Fat chance. We've seen plenty of what Republican economic initiative has done for this country in the last 20+ years. It's done a fantastic job enriching the top 1% of the people in the country, that's what it's done. All the while the middle class is going backwards over the last 30 years. Put another way, the middle and lower classes are heading down the toilet; we hardly need the final flush of a Flat Tax.

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