Thursday, January 3, 2008

Fraser Institute trying to sell the flat tax in Canada

I am like everyone else in that I don't know if creating a "flat tax" will do all the things that it's proponents say it will. There haven't been enough experiments with it to draw a conclusion. Ignoring this, there are two ways the flat tax is marketed that don't make sense to me. First, the fact that doing your tax returns will take five minutes. This is defiantly an improvement that is worth something, however, it is more than trumped by the fact that your income will change (up or down). Not having to do a tax return can only be worth as much as it costs to pay somebody to do it. Second, I don't understand why they call it a "flat tax," it's not. Most proposals have a large exception for low income. The flat tax is more of a two bracket income tax. I don't think that many people actually understand this. If you want to read the rest of the arguments for a flat tax here's the link.

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