Flat tax

Presidential hopeful Rudy Giuliani didn't get a warm welcome today in Northern Florida.

JACKSONVILLE, Fla. (AP) -- Republican presidential candidate Rudy Giuliani ran into a buzz saw of opposition Saturday when he explained his opposition to a flat federal income tax.

Giuliani addressed a group of about 500 people in a standing-room only crowd at a town hall meeting at the University of North Florida, answering questions on a variety of topics from Iraq and Iran to Social Security and his plan for tax cuts.

Several dozen people wearing white flat tax T-shirts and hats and carrying signs jeered when Giuliani, in response to a question, said he would not be in favor of a flat tax.

"I have to study it some more," the former New York City mayor said. "I don't think a flat tax is realistic change for America. Our economy is dependent upon the way our tax system operates."

Giuliani emphasized he supported a simplified tax system and cuts in federal taxes, including elimination of the so-called death tax, but his response to the flat tax question brought some cat calls and jeers.

Many politicians talk about simplifying the tax code. Flat tax proposals have been out there for twenty years at least. In theory flat taxation rates, without deductions, would be the ideal method so far as federal income taxes are concerned.

Fat chance it will ever happen. Here's my opinion on why.

It has nothing to do with fairness, though Democrats or liberals will argue that is why they are opposed. The real reason behind the opposition to a flat tax is a whole industry would be wiped out by a simple tax code. Billions are spent every year on Tax attorneys, CPAs, and far more ordinary people who work for H&R Block. This would almost all be wiped out if we went to a simple tax rate, with no deductions. Do you think these special interests haven't flexed their muscles(aka lobbying) behind the scenes to make sure the tax code stays complicated?

I earn money every year(and have done so for nearly 20 years) by helping people file their federal income taxes. It wouldn't just be small people like myself who'd take a hit in the wallet if a flat tax ever became the law of the land.

Bottom line- A flat tax is as likely to pass as it is to snow in South Florida in any month of the year.

Linked to- Adam, Big Dog, Blue Star, Point Five,