Friday, April 22, 2005

Quick Thought on the Flat Tax

The standard argument for a flat tax on income relies on simplifying the tax code in the hopes that this will induce evaders to begin paying their taxes again or somehow let people spend less time doing their taxes. It's unclear what the benefit from that actually is, but in any case, the premise is wrong. The annoyance and complication of doing taxes doesn't come from looking up your gross income in the booklet to see how much you owe. That takes about five minutes. The annoying and complicated part is *calculating* your gross income. And until we have pre-market lump-sum transfers doing taxes will be a pain in the ass.

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