- John Gaver
- Humble, TX
- United States
This conversation is closed.
How can a flat income tax eliminate the IRS?
There has been a lot of talk lately, with members of Congress suggesting that we go to a flat income tax, with no deductions or other breaks, so you can fill out your tax return on a postcard and that this would somehow eliminate the IRS. But wouldn't there still have to be someone to audit all those postcards?
Wouldn't there have to be someone checking to see that the millionaire reported all of his income, that the waitress reported all of her tips, and that the corporate C++ programmer reported his income from developing websites on the side? Does anyone really believe that the government is suddenly going to trust everyone to report all of their income?
It seems to me that the IRS would become far more prevalent in our lives, under a flat tax. I mean, think about it…
1) Have you ever heard of a government agency getting smaller? Then consider that it currently takes weeks to audit a millionaire and months to audit a billionaire and under a flat tax, those audits will take an hour or two. What will the IRS do with all that spare time?
2) Consider that with no tax shelters to examine, the IRS will have to be more aggressive in finding what is not reported at all.
I'm thinking that instead of eliminating the IRS, the IRS will not only continue, but that with all that spare time, they'll perform 30 or 40 times more audits than they do today and they'll be far more aggressive in doing so. Worse, since the income of most millionaires (except crime lords) is well documented and tracked by the banking system, the IRS will probably focus on middle and low income taxpayers, where cash payments are common and banks aren't required to report every small deposit.
Seems to me that the IRS would not only continue under a flat tax, but low and middle income people, who work off book, would be most hurt by it.
Am I missing something here?
By the way, this is the question that moved me away from supporting a flat income tax and ultimately led me to support the FairTax.