The Cato Institute’s Dan Mitchell hosts a new video for the Center for Freedom and Prosperity explaining the benefits of switching to a flat-tax system. Fairness and growth are big reasons to eliminate the Byzantine tax code we have now, but the most resonant argument could be civil liberties. The IRS, Mitchell points out, has enormous authority to invade the privacy of taxpayers, and those accused of tax evasion have to prove their innocence rather than the government proving guilt. Since tax deductions mainly favor the wealthy, the benefits from the elimination of tax breaks would redound more to the middle class, Mitchell argues — and would make compliance so easy that even a third-grader or a politician could handle it:
The flat-tax proposal competes with the Fair Tax in the realm of tax reforms, and each have their benefits and drawbacks. The flat tax would make it easy to file taxes, but would also leave in place the mechanism that allowed Congress to concoct the current tax code — the Sixteenth Amendment. If we went to a flat-tax system, Congress could easily start growing the code again to curry favor and conduct their social engineering. On the other hand, the Fair Tax would tax consumption, which could burden growth, and would require the repeal of the Sixteenth Amendment, which is a long shot at best. (Fair Tax supporters usually express support for a flat tax as an intermediate measure to repeal.)
What’s obvious is that we need a systemic overhaul of American tax policy. Either of these options would make a lot more sense than the bureaucratic morass we have now.