Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10.1 6/24/83; site mit-eddie.UUCP Path: utzoo!watmath!clyde!akgua!mcnc!decvax!genrad!mit-eddie!lkk From: lkk@mit-eddie.UUCP (Larry Kolodney) Newsgroups: net.politics,net.taxes Subject: SIMPLE TAX: Article Excerpts Message-ID: <1618@mit-eddie.UUCP> Date: Sun, 15-Apr-84 21:03:50 EST Article-I.D.: mit-eddi.1618 Posted: Sun Apr 15 21:03:50 1984 Date-Received: Mon, 16-Apr-84 07:31:40 EST Organization: MIT, Cambridge, MA Lines: 103 From THE SIMPLE TAX by Robert Gnaizda in Coevolution Quarterly Summer 1983. The present federal income tax code, an incomprehensible 1784 pages, is longer than the aggregate of the Bible, the Koran, and the major BUddhist scripture. As a result: The vast majority of Americans have no faith in the tax system and their government and/or feel righteous in violating such tax laws; Ninety-nine percent of Americans are functional illiterates since, with the exception of some, but not all, tax attorneys and CPAs, no one understands the implications of a system that is incomprehensible, counterproductive to a postindustrial society, and often violative of all our training and experience in logic, reason and ethics; ... To replace our complex federal tax system, a diverse and bipartisan group of US senators are urging a federal simple or flat tax that would fit on a postcard... Such a tax would cover all income from every source and eliminate every deduction, no matter how meritorious. ... ... over a recent three-year stretch, Texas billionaire Bunker Hunt paid only ... $9.75 in income taxes for the entire period of 1975-77. The simple tax would eliminate the inequities by ensuring that persons earning equal amounts of income pay equal amounts of tax, no matter how artful their tax attorneys may be. SIDEBAR: The most discussed proposal for a federal flat tax comes from the Hoover Institution, a Ronald Reagan "think tank" that has been one of the leading advocates of supply-side economics. Unfortunately, its flat tax is a misnomer. It is not a true flat tax since it fails to consider the impact of the highly regressive 7 percent social-security tax, which is only levied on the first $35,000 of salary. UNDER A CALIFORNIA SIMPLE TAX INITIATIVE THERE WOULD JUST BE TWO TAX RATES FOR EVERYONE. FOR EXAMPLE, FOR A COUPLE, THOSE RATES WOULD BE 4 PERCENT FOR ALL INCOME UP TO $50,000 AND 7 PERCENT FOR ALL INCOME ABOVE $50,000. (THE PRESENT MAXIMUM IS 11 PERCENT.) [The proposal is for a california state tax, although a federal simple tax is also advocated -lkk] Under the principle "a rose is a rose is a rose" all income, no matter how ingeniously labeled, would be fully taxed, including all income... There would be only two exceptions: 1) The first $75000 of income per individual, $10000 per head of household, $15000 per married couple would be excluded from tax in order to protect the poor and the vast majority of social-security recipients. 2) A $1000 deduction per dependent would be permitted. ... A typical family of four with the median California income of $22000 would pay a California simple tax of just $200. .... The major question raised is whether a simple or flat tax with a 7 percent maximum rate would raise sufficeint revenue. It is estimated that in 1985... gross income in California could be an estimated $360 billion. This could generate $11 billion in tax revenue, even after substantail minimum exclusions for individuals and married persons. ELEVEN BILLION DOLLARS IS APPROXIMATELY $4 BILLION MORE THAN WAS GENERATED BY CALIFORNIA'S INCOME TAX IN 1981. THIS IS MORE THAN ENOUGH TO MAKE UP FOR THE ESTIMATED $1.5 BILLION EXPECTED STATE DEFICIT WITHOUT NEED FOR AN INCREASE IN THE REGRESSIVE SALES TAX. WHAT TO DO It is unlikely that any legislature dominated by million-dollar special interests will voluntarily eliminate a system that is a major source of campaign funds. A number of people are proposing as a first step a Simple Tax Initiative for 1984 in CA. If you are interested in participating, or want information on how to produce a simple tax in other states, write to: Simple TAX 3020 Bridgeway Suite 166 Sausalito, CA 94965 ----- I hope I've covered most the relevant details in these excerptes. Other topics include the need for mortgage deductions, etc. Read it yourself and see. -larry -- Larry Kolodney (The Devil's Advocate) (USE) ..decvax!genrad!mit-eddie!lkk (ARPA) lkk@mit-mc