Q&A Friday #17: When Will We See A Flat Tax, Vat, Or National Sales Tax?

Question: “What are the chances of us seeing actual tax reform during the Bush Administration? How about in the next 50 years? By reform I mean some sort of flat tax, VAT, or national sales tax that does away with the IRS.” — taxsucks

Answer: While there would be a lot of conservative support for national sales tax or a flat tax, the Democrats would fight it tooth and nail, Republicans couldn’t rely on the RINOS in the Senate, and the American public isn’t sold on the idea yet.

The American people tend — quite understandably — to be very suspicious of wholesale changes to the tax system and any numbers put out by the government. Plus, the groundwork just hasn’t been laid for a flat tax with the public yet.

That being said, I think flattening and simplifying the tax code is definitely a possibility — and half a loaf is better than none.

Can it be done in the next 50 years? Sure. One of the things that may help is that a number of Eastern European nations — including Estonia, Latvia, Slovakia, Serbia, Romania, Georgia, Ukraine, & Russia have already implemented flat taxes — and 5-10 years if they turn out to be big success stories, it’ll make it an easier sell here.

Switching from a progressive tax system to a flat tax or national sales tax is one of the most important things we can do to insure that America’s economy remains competitive in the 21st century. So, the sooner we implement a new tax code, the better…

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