On Monday, the Bloomberg editorial staff came down on the side of making the tax code more “progressive.” The piece was in response to flat income tax proposals from three or four of the current Republican presidential primary candidates. One can only hope that what passes for thinking in that article is not repeated in future Bloomberg work because it’s very deficient indeed. You’d need a map and a compass to journey deeper into mindlessness, but then, being mindless already, you couldn’t read either one.
Still, the flat tax flap does give pause for thought. Is flattening federal income taxes really what the Republican candidates want? Or are they using the idea as a gimmick? As a recent Blogcritics offering laments, intellectual thought rarely makes an appearance at a political debate.
Assessing the current GOP flat tax proposals with this precaution in mind, are they just shallow attempts to grab the ever-fickle media spotlight? Or, like a lightning rod, are they purposefully erected to draw attention to the real problem? Or is it a combination of the two: a spotlight-grabbing gesture that accidentally shines light on a serious issue? Door number two would be nice. Really. And we really think the answer lies there.
The Bloomberg article is a string of knee-jerk claims that ignores the essence of the flat income tax argument. For example, a true flat tax is based on gross income rather than adjusted gross, resulting in a net revenue gain. It also simplifies the federal tax code. Today, that legislation, together with the IRS’s interpretive rulings and regulations, is almost 73,000 pages. It’s a conglomeration of complexity and convolution that almost no one, including your friendly taxman and even White House officials, understands.
But, Bloomberg editors are happy with it and they should be happy for a long time to come. The flat tax idea has been around for decades and has gained absolutely no Congressional traction. While it has a popular fairness appeal, it cannot withstand the phalanx of special interests arrayed against it. The tax code is not an unintelligible mishmash by happenstance.