You are absolutely correct. The way to eliminate corruption overnight is by getting the government out of business. For the same reasons why the Left says we need a strict separation of Church and State, we similarly need a strict separation of the Economy and State.

Zbigniew:

You wrote:

“A flat tax cannot be implemented in parallel with the abolition of the CIT – unless the flat tax will be at a high rate. The reason is that you can’t finance even the basic functions of the government without taxing corporations _and_ individuals.”

It depends on what you mean by “the basic functions of government.” The welfare state is not a basic function of government, nor is the regulatory state. Yet spending on those two categories surely constitutes well over 50% of the federal budget.

Even if you kept government spending at pre-Obama levels, government spending has constituted roughly 20% of GDP for a long time. Therefore, a 20% flat tax rate would almost certainly be revenue neutral – and given the fact that a flat tax would improve compliance and reduce the waste associated with paying tax professionals to avoid/minimize taxes, I would think that the rate could be slightly lower as long as the line were held on spending. The Hall-Rabushka flat tax which I posted here a while back argues that a 17% flat tax would be revenue neutral – and that plan eliminates corporate income taxes.

Even if the rate were slightly higher, it is my understanding that a flat tax of somewhere between 17% and about 23% would be sufficient to eliminate all payroll, corporate, investment and estate taxes. I would accept that in a heartbeat.

And the bottom line is that even if the rate would need to be higher in order to sustain current levels of spending, the virtue of the flat tax is that it would make the choice involved explicit and incapable of evasion. Government programs could not be proposed with the idea that they would be paid for by someone else. That would make for a much more honest debate about government spending.

Finally, I believe that former candidate Steve Lonegan’s flat tax proposal had an important improvement over all previous flat tax proposals I have seen. His plan to tax the first dollar of income so that EVERY income earner has to pay taxes and therefore has a stake in reducing taxes was an excellent idea that I had never seen advocated by anyone. Every other flat tax plan I have seen includes “generous deductions” so that the poor will still not pay any taxes. The cost of government should not be free for anyone, and Steve deserves enormous credit for taking that position – even though he did not win the primary election.

Well, then the 2008 nominee of the GOP was the wrong nominee by that measure, because he would add even more regs to the tax code and would manipulate it to pay off the special interests that backed him.

A flat tax cannot be implemented in parallel with the abolition of the CIT – unless the flat tax will be at a high rate. The reason is that you can’t finance even the basic functions of the government without taxing corporations _and_ individuals.

Corporate tax must be eliminated. A Flat Tax system should replace our current massive and unwieldy tax code. Regulations should be minimized. Taking these actions would reduce extortion and bibery schemes from being contemplated.

It has long been a principle of Republicans in general and conservatives in particular to hold our people up to a very high standard of moral and ethical behavior. As a matter of historical record, when any of our own violated those standards we were the first to turn on them – unlike Democrats and other liberal Statists whose only standard is political victory at any cost.

If Keene and Norquist and any others are guilty of these accusations, hang the lot of them out to dry.