Taxpayer blues: Where are the flat-taxers now that we really need them?

By JOSEPH SPEAR

Newspaper Enterprise Assn.

Well, here we are again, weary taxpayers.

We've just consumed a collective 5 billion hours and spent the equivalent of $150 billion to $200 billion wrestling with income tax regulations and forms. You had 9,000 pages of the former and 600 varieties of the latter to consult and choose from, depending on how you filed. If you selected the simplest means of coughing up your hard-earned money - the 1040EZ - you had to wade through more than 30 pages of fine-print instructions.

It's such a pitiful, abject, stupid waste of resources.

Exactly how wasteful? Well, an economist named James Payne wrote a book called "Costly Returns" a few years ago, in which he estimated that the total national tab - including the expenses of record-keeping, filing, auditing, attorneys and accountants, and the money lost through the disincentive of marginal tax rates - at an astounding $593 billion per year.

Great Tax Debate

What happened to the Great Tax Debate? Last year, you couldn't read a paper or scan the spectrum without encountering a tax simplification scheme. There was the Armey/Shelby flat-tax plan, the Forbes flat-tax plan, the Specter, Buchanan, Gephardt and Gramm flat-tax plans. There was the Kemp Commission and talk of value-added and sales tax systems.

Actually, we know what happened to the vigorous colloquy, don't we? The election campaigns ended. This year, we're back to crotchety old Spear, crying in the wilderness. Next year, we'll have more elections and the pols will need something to babble about and maybe we'll talk about flat taxes again.

I say it's time to cease this biennial yapping and do something. Why not launch an experiment in which we gradually shift to a flat-tax system? If it seems to be working and if the economy holds up during the transition, we could try it for a few years and then make a final decision.

Personally, I would favor a plan similar to those touted by Dick Armey and Steve Forbes. They would allow large allowances for a family of four ($33,300 for Armey, $36,800 for Forbes) and then tax wages, salaries and pensions in excess of that amount at 17 percent. There would be no other deductions.

Businesses would pay 17 percent on income, after expenses.

Manifold advantages

The advantages of such a system would be manifold:

-- It would be so simple you could file on a postcard.

-- It would be fair. Because of the personal exemptions, the poor would be protected. Everyone else would be paying the same rate. The exemptions would also render the system progressive: The more a person earns, the greater the percentage of total income the person would pay - up to the 17 percent cap.

-- It would encourage savings and investment, the income from which would not be taxed. The economy, as a result, might well explode with activity. One Harvard economist, Dale Jorgenson, predicts a $2 trillion increase in national wealth.

-- It would discourage corruption because the lack of loopholes would reduce the market in political favors. Did you know there are nearly 13,000 special interests represented by lobbyists in Washington, D.C.? Did you know members of the tax-writing House Ways and Means Committee receive the greatest percentage of their campaign contributions? Gee, wonder why?

-- It would stifle "social engineering" by politicians who think they know better than we do where we should invest, what we should purchase and how we should contribute.

Issue demagogued

The people who wanted our votes last year demagogued this issue to the point of nausea. They said that home values would plummet and charities would suffer. They said the middle class would pay more taxes and the rich less. They said government revenues would plunge. They said the stock market would tumble.

So I say, let's test it. Let's ease into it by degrees and see what happens. My guess is, we would love it so much that we would want to make it a capital crime to mess with it.