Flat tax doesn't even simplify anything. The problem with taxes is to determine what the taxable income is. Figuring out the tax rate is trivial once you have that, no matter what the curve is. Flat tax is just another attempt to give big tax breaks to higher incomes.

    > Flat tax doesn't even simplify anything.

Yes it does, depending on the implementation. There's a 2005 Economist article which does a good job of summarizing why[1].

BEGIN QUOTE

Fewer brackets are simpler to administer, but one bracket is simplest of all. Under a pure flat tax, the taxman takes the same cut from the last dollar you earn that he took from the first. The appeal to high earners is obvious. But the administrative elegance of such a system is not so immediately apparent. Because every dollar is taxed at the same rate, it does not matter to the tax collector how many dollars are going to whom. Thus, in principle, the taxman could simply withhold 20% of a company's payroll, without needing to know who was paid what. Add a second rate of tax, however, or a personal exemption, and the tax collector must find out how much money is going into each pay packet before he can be sure of collecting the right amount from the right person. In America, for example, the tax collector needs to tax the wage packets of 130m or more employees, rather than simply taxing the payrolls of 8m or so enterprises.

END QUOTE

The mistake you're making is assuming that the tax system can only be simplified on the individual level, but as the quote above demonstrates this isn't true.

Certain changes to the tax code do entirely away with the need for the government to exhaustively audit large parts of the economy.

Another quote from the article demonstrating such a case:

BEGIN QUOTE

In Canada, Australia and the European Union, for example, staple foods, but not restaurant meals, are exempted from value-added tax. [Therefore] hot roast chicken is taxed, but cold roast chicken is not. “Does anyone expect tax administrators and business owners to have thermometers on hand when they do their tax calculations?”

END QUOTE

In this example, by progressively taxing food you're creating the accounting problem that the government theoretically has to track economic activity down to the level of whether a chicken was warm or not when it was sold.

Simplifying the tax code does away with needing to solve that problem entirely, and eliminates some of the current incentives for tax avoidance and other fraud.

1. https://www.economist.com/special-report/2005/04/14/the-case...

The parent's comment still applies. If the progressive brackets were just swapped for a flat tax, the tax man still needs to know how much each employee had as deductibles, e.g. number of dependents, donations to charity, mortgage interest, etc.

> The parent's comment still applies. If the progressive brackets were just swapped for a flat tax, the tax man still needs to know how much each employee had as deductibles, e.g. number of dependents, donations to charity, mortgage interest, etc.

No, because the idea behind a flat tax is to eliminate most or all of those deductions, the same way they've already been eliminated for people who pay AMT instead of normal income tax.

True in theory, but virtually every mainstream "flat tax" that actually gets to the stage of having a concrete proposal acknowledges the need for deductions. I don't recall ever seeing a true flat tax.

There's flat tax proposals and implementations at every level of the economy in different countries, not all of them have to do with income tax.

E.g. the case of the warm and cold chicken being taxed at different rates, as described in the linked Economist article.

It's common in places with such a distinction in the tax code for some stores to sell packaged cold food clearly intended to be eaten on the go, and then to conveniently offer a customer-operated microwave on-site partly as a way to avoid paying a tax that distinguishes between food sold as groceries v.s. take-away food.

I'm not advocating for flat taxes, but it is correct to say that such proposals in general do away with such emergent absurdities, and decrease the need for government bureaucracy.

This thread is specifically talking about tax plans from Republicans in the US Congress.

That there are gray areas (groceries vs restaurants) that can be difficult or because the math is slightly more challenging are not persuasive arguments, to me. As universal as a "flat" income tax having deductions are sales taxes having exemptions, so they also are never "flat" in practice either.

And at that point, you've pretty much acknowledged that a true flat tax is unfair and regressive, and now we're just arguing over how many tax brackets there should be. You want there to be 1 but propose 2 with no argument for why 2 is the optimal number. While I agree that there is marginal complexity with each one, that only affects people who do their own taxes by hand. Structure it so that most people are covered by the bottom 4, say, and I have no problem with a dozen or more.

> While I agree that there is marginal complexity with each one, that only affects people who do their own taxes by hand.

The complexity of the formula generating the lookup table doesn't affect the users of the lookup table, so I disagree: number of brackets has no meaningful effect on complexity of manual preparation.

"No, because the idea behind a flat tax is to eliminate most or all of those deductions,"

Removing deductions has nothing to do with the tax curve. You could do that with the current curve and tweak it accordingly.

Sure it does, because if you have deductions, your effective tax rate isn't actually flat.

> Removing deductions has nothing to do with the tax curve. You could do that with the current curve and tweak it accordingly.

In theory, but (serious) advocates of the flat tax generally are proposing both.

My impression is that most advocates want the flat part which reduces taxes on high incomes and then are pretty hand wavy about deductions.

This might be the case in the US, but be aware that most advocates of flat taxes globally - including almost all economists who do so - advocate precisely for removing deductions.

In New Zealand, for example, all prominent advocates of flat taxes are also proponents of not following Australia or the UK's example of having GST/VAT exemptions for some categories of goods.

In fact, removing itemized deductions alone would do this, because the standard deduction is mathematically equivalent to a 0% bracket.

Alternately, you could even have a progressive, flat tax with a standard deduction of $150,000 and like a 40% rate. I’m surprised the Democrats haven’t proposed that just as a publicity stunt.

Deductions are not entirely equivalent to a 0% bracket in a progressive tax scheme, they come out of top bracket income.

So high earners get a larger tax reduction from deductions than low earners. There's not really a way to do that with a 0% bracket (and in fact we have both a 0% bracket and deductions).

That works fine for salaries and whatnot, but even without outright deductions, you would still have to compute net income in a lot of situations, including individual proprietorships and capital gains.

That's true. I never said the Ted Cruz postcard gimmick was honest; if it was honest, then it couldn't be sabotaged by simplifying the taxpayer experience for the existing schedule of rates and deductions.

100%. Taxable income should be gross income. That would make everything so easy.

The problem is the existing tax schedule isn’t so clear. Depreciation of assets for example. By “simplifying” tax filing without simplifying the underlying calculations, there is far less public visibility of just how broken the tax system is. A flat tax is closer to good than our current system. People that oppose flat taxes do so because they want other people to pay more. It’s that simple.

See what Milton Friedman had to say about tax code complexity. TLDR: it gives politicians the ability to curry favor or punish and it’s the source of their real power. The power to tax is the power to destroy. A flat tax with a single standard deduction effectively declaws the government from being able to pick winners and losers based on from whom the campaign donations come.

> By “simplifying” tax filing without simplifying the underlying calculations, there is far less public visibility of just how broken the tax system is.

That's a decently idealistic viewpoint, but "complicated" doesn't necessarily mean "broken". For example, pretty much all Unix-style operating systems have not only a ton of now-unnecessary code to handle text I/O from 1960's teletype machines, but they even come with a "terminal emulator" that literally emulates the behavior of a 1960's teletype machine. That's how the command line works. You would never design it that way from the start, it's complicated, it's crufty, and it's vaguely horrifying, and yet it works and solves virtually all of the real problems that real people would have with that system. Just like letting the IRS fill out the first draft of your tax return.

> A flat tax is closer to good than our current system.

No, it's not.

> People that oppose flat taxes do so because they want other people to pay more. People that oppose flat taxes do so because they want other people to pay more. It’s that simple.

Some of the richest people oppose the flat tax. And they do so because they want people poorer than themselves to pay less than they would in a flat tax scheme funding the same services.

> See what Milton Friedman had to say about tax code complexity. TLDR: it gives politicians the ability to curry favor or punish and it’s the source of their real power.

Maybe Friedman said that, but it's wrong; the monopoly on violence does that, and the tax system isn't particularly special among the avenues by which the power that monopoly grants can be applied.