Goal: Clear and Simple
Any income tax – flat or progressive – that includes corporate or payroll taxes is not simple.
On the other hand, a flat income tax is almost as simple as you can get, but only if it doesn’t include a corporate tax, a payroll tax or taxes on savings and investment. Any corporate income tax, payroll tax or a tax on savings and investment would completely negate any benefits of a flat income tax.
Any advantage that flattening the personal income tax gives individual taxpayers under 9-9-9, is offset by adding a layer of complexity for retail businesses. Granted, that added complexity is minor. But as with the flat income tax, the corporate income tax component of 9-9-9 also adds to the complexity of that scheme.
The FairTax has only a very slight edge in simplicity, over a truly flat income tax. That’s because under a flat income tax you still have to keep track of your earnings and calculate your taxes once a year, whereas under the FairTax, all tax calculations are done for you at the cash register. Some may suggest that this difference is so minor that it should be considered insignificant. But remember that we are already being very generous with the flat income tax in assuming that a flat income tax will have no corporate, payroll or savings tax component. We can only favor it so much. Therefore, the FairTax edges out the flat income tax on simplicity.
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