Pete du Pont, former governor of Delaware, comments on US tax reform, in particular the Steve Forbes proposals. First some useful statistics from Steve Forbes’s new book, “Flat Tax Revolution”:
1) The tax code has been amended 14,000 times and is 60% longer since Ronald Reagan’s presidency.
2) The cost of compliance in terms of taxpayer time has risen 67% in the past decade and a half.
3) Americans spend more than six billion man-hours each year filling out tax forms at a cost to the economy of $200 billion.
And here’s a brief summary of the Forbes plan:
There is a better solution, one advanced almost 10 years ago by the National Commission on Economic Growth and Tax Reform (of which I was a member): “a single, low tax rate with a generous personal exemption”–a flat tax.
Under a flat income tax there would be one rate–Mr. Forbes recommends 17%, with a personal exemption of $13,000 per adult and $4,000 per child or dependant, along with a $1,000 per child tax credit. Thus a family of four would pay no federal income tax on its first $46,000 of income. There would be no double taxation of dividends, no capital gains taxes, death taxes, or taxes on Social Security benefits. The tax return would be simpler and easier to fill out: From your wages and salary subtract your personal and dependent exemptions and multiply the result by 17%. It would almost be a tax on a postcard, a huge improvement over the massive complexity of the Internal Revenue Code. (Corporate profits would be taxed at a flat 17% too.)
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