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Friday, October 21, 2011

Bring on the flat tax!

herman-cain-rick-perry Republican presidential candidates, businessman Herman Cain and
Gov. Rick Perry | Photo: Justin Sullivan/GettyImages

[This entry was published previously on Postmedia Network’s The Real Agenda blog.]

The 9-9-9 tax plan being proposed by Republican presidential candidate Herman Cain is beginning  to take heavy fire from other presidential hopefuls and analysts alike. Some  claim Mr. Cain’s plan would shift the tax burden in the United States, raising  taxes on the poor while cutting taxes for the rich—hardly the narrative Mr. Cain wants to hear.

The 9-9-9 tax plan has resonated with Republicans and has helped  propel the former Godfathers pizza CEO onto the top rung of leading contenders  for the Republican nomination. His quick rise in polls, though, has meant Mr.  Cain’s plan is receiving more scrutiny.

Mr. Cain would replace the current federal tax code in its  entirety with a flat 9% personal income tax, a 9% corporate income tax, and a  9% tax on sales of new products. He would also eliminate the payroll taxes for  Medicare and Social Security, along with estate and capital gains taxes. And,  in a second phase, Mr. Cain would eliminate all federal income taxes  for individuals and for corporations and replace them with a national sales  tax—Herman Cain, however, hasn’t yet offered an estimate of the sales tax  rate that would be necessary to raise sufficient money to fund the federal  government.

I spent years as an accountant with responsibility for a  corporation’s taxes and remember well the bookcase full of material I referred  to daily. Like that of the United States, the Canadian tax structure is  bewildering in its complexity. And, while Mr. Cain’s campaign hasn’t  offered nearly enough specifics for anyone to do a thorough analysis of  his 9-9-9 plan, I welcome the fact that the idea of a simple flat tax is  now on the table for open debate.

I am encouraged also by Gov. Rick Perry of Texas saying recently  that he too will propose a flat tax as part of a tax overhaul  program.

According to The New York Times, “He [Perry] has in the  past suggested support for some form of a flat tax, but has backed off from  endorsing one. Mr. Perry recently recruited as an adviser Steve Forbes, who  ran for president in 1996 on a pledge of implementing a single flat tax on  income, without any deductions.”

On Wednesday past, Gov. Perry gave us the broad  outlines of his tax plan that he said will feature spending cuts, entitlement  reform and a flat tax. And he promised then to provide specifics in six days. 

Should a flat tax be successful in the United States, we could  expect to see one here in Canada within a decade. Imagine: no need for a  tax accountant or expensive tax software, no complicated forms, few itemized  list of deductions, credits or other “loopholes”. And no estate tax, no  capital gains tax and no dividends tax.

I can hardly wait.

 

 

Except photograph, © Russell G. Campbell, 2011.

The views I express on this blog are my own and do not necessarily represent the views or posi­tions of political parties, institutions or organi­za­tions with which I am associated.

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