Yet Another Modest Proposal: A Flat Income Tax

The two best books Tom Clancy ever wrote were The Hunt For Red October and Red Storm Rising. Okay, so the latter of the two was a collaborative work between Tom Clancy and Larry Bonds, but Bonds has written some pretty good stuff himself, and so it's no surprise that the collaboration bore good fruit.

Clancy's fiction post-Red October fell more and more into the "potboiler" category: something the author wrote to keep the fire going under the pot in the kitchen so he could keep eating. Even then, some nuggets of value kept appearing in his product line, and as he established a solid reputation as a writer of the techno-thriller, he acquired an amazing - even fantastic, even unbelievable - amount of credibility. Not bad for a fiction writer.

Even so, his novels kept growing. I mean, they got longer. His publisher had to go to thinner paper and smaller fonts (no, I'm not kidding) to keep the books to a manageable size, and reading them became somewhat of a chore, as Clancy's text devolved into Dickensian (or maybe Dumasesque) exposition. However, this penchant for lengthy exposition, combined with his fantastically acquired credibility, allowed his characters to stand in for Clancy - to stand on his soapbox for him and preach his gospel to the world.

Where am I going with all this, you ask? What does all this have to do with a flat income tax? Ah.

In Executive Orders, Clancy begins with the premise that nearly the entire federal government - all three branches - have been demolished in one terrible stroke, leaving an unelected (think Gerald Ford) President in charge of guiding the country safely through a constitutional crisis and rebuilding the federal government. It's Clancy's chance to write an essay beginning with the sentence, "If I could start with a clean slate and rebuild the U.S. government, I would ..." and thus a would-be potboiler becomes a political treatise.

One of the things Clancy advocates for in his book, very strongly, is a "flat tax." The idea isn't new, and it didn't originate with Tom Clancy. It's an idea I've toyed around with for a long, long time. Politicians bring it up once in a while, but they usually get laughed at for their simplistic views or shouted down by all the special interests who benefit from the status quo. In Executive Orders, Tom Clancy gives his character (and therefore himself) a bully pulpit from which to argue for a "flat tax."

There are many other names for it, but a "flat tax" is basically this: figure out how much money you made last year, and send your share of it to the IRS. There are no deductions, no exemptions, no credits, no shelters or dodges. Everybody pays the same share, a fixed percentage of their income, and the percentage is the same for everybody.

Let's say the percentage is 8 percent. Then a day laborer who makes $10 per hour, or about $10,000 per year, pays $800 in taxes, while the ousted president of Hewlett Packard, with a severance package of $28 million, pays $2,240,000.

Every penny of it. No hiding it in other investments, in charitable contributions, or elsewhere.

Having a flat tax will make it easier for the federal government to figure out a budget, because they will know more accurately how much money they will collect in a given year. It will make it easier for the American taxpayer to figure out how much tax they owe, since the work can be done with a handful of 1099s and W-4s and a pocket calculator, in about an hour, without the aid of accountants, tax lawyers or investment advisers. It will make it easier for taxpayers to be honest, as it will simply be harder to cheat. And it will also make it easier for politicians and bureaucrats to be honest, as taxpayers will have a clearer idea of how much of their money Uncle Sam really wants, and what he wants to do with their money.

It will not penalize the low-income worker for making too little, and it will not penalize the high-income worker for his success. At the same time, it will ease the current burden on the middle-class worker, the poor sucker who is called upon to pay increasingly more than his fair share of the tax bill.

Finally, simplifying the tax code like this takes the power out of the hands of the politicians, the special interests that they serve, and the thousands of bureaucrats tasked with enforcing the current tax code - bureaucrats who are not accountable to the American taxpayer in any way and are nothing more than overhead, a hidden and increasingly unbearable burden on the back of the American taxpayer - and puts the power back where it belongs, in the hands of the people, the American taxpayers.

Executed correctly, a flat tax will be revenue-neutral as far as the federal government is concerned, meaning that the IRS will collect no more and no less than it would have collected under the old tax code. But it will be a boon for American workers and businesses alike, as they will spend less time and money worrying about their taxes and paying people to figure their taxes for them.

Executive Orders was written in 1996, and like Debt of Honor which preceded it, EO appears to have predicted some of the events and crises of the early 21st Century. Much has been written about the flat tax since 1996, and much was written about it before 1996. The flat tax seems like an idea whose time has come, even if it's still not politically palatable. If you want a summary of all the issues facing adoption of a flat tax, EO is a good place to start.