Rusted Sky

I don't think you are reading Guliani correctly. He didn't say the economy exists to serve the government, he said the opposite- that the economy is dependent on the tax structure. To a large degree this is true. One of the problems with big new wonderful ideas is that they get implemented by politicians. If you yank the rug out from under the current system, even if you have a better idea of where to put the rug in the future, in the short term, you have a mess. Businesses like predictability. Stock prices, commodities futures, contracts, real estate prices etc etc are all based on an assessment of future business conditions. Suddenly, dramatically change one of the biggest future conditions- the tax structure- and it all goes out the window. It does not matter if you think "but the new way will be better"; the problem is, all the contracts were negotiated figuring the old way. That, and the business community at large tends to be suspicious of revolutionaries, the reality never, ever, meets the promise.

My prediction: If a flat tax system ever gets implemented, five years later, the flat taxers will sound exactly like the Marxists: "Yes, we agree its a disaster, but that's because our TRUE system has never been implemented, just a version twisted and bastardized by fallible humans. All we have to do is get rid of THEM and..."

Ben

You've got a good point, Ben. The tax structure IS a part of the economy, though one that has (IMHO) gotten a trifle out of control. (The ocean is a trifle wet, too.) It is too large, too convoluted for the layman to understand. Heck, if it wasn't for computers and tax software, we'd have a heck of a time around April 15th.

It's time to simplify things. And it's going to hurt no matter which way we go. So which is preferable - a surgeons' knife or leaving a metastisizing tumor alone to grow as large as it wants?

Long time no hear from, BTW. How you been doing?

J.

Me? Doing fine! Not gone, I just tend to keep quiet if I have nothing interesting to say.

Now, this whole issue of surgeon-knifing the tax code- it is huge and chaotic, yes, but the biggest problem is that the people who are supposed to know it best- the IRS employees- are government workers, with all that doesn't have to be said about government workers. How to make it easier? I don't know, I'm not an accountant, but I do know that there is no easy answer. The reason for that is that law requires precise definitions, and about half of the profession of "lawyer" revolves squirreling out of a precise definition. If you simply declare 20% of all income taxed, watch how fast they scramble to squirrel around with the definition of "income"- in no time at all you end up with a huge mass of clarifications and exceptions, and poof, right back where we are now.

Let's face it; once we had a president actually get away with questioning the meaning of "is" in court without getting slammed for contempt, it was all downhill from there. I really can see the folks of Beverly Hills evading the flat tax by telling us they have no income- everything you see, the clothes, jewels, sports cars, private jets, are all just items they are "testing" or "demonstrating" for marketing companies- which for some reason always lose money, and yet seem to stay out of bankruptcy.

Ben