SO I'VE BEEN THINKING

...and what I've come up with is the conclusion that maybe that congressman from Wisconsin...what's his name...Ryan?...may be on to something. Maybe the concept of progressive taxation IS the problem. Maybe a flat tax for EVERYBODy--and yes boys and girls a corporation is a "body"--is the way to go. What could be fairer than an exactly similar tax rate for the rich and famous based on yearly earnings from any source as that applied to the local cabbie. Now we cifan discuss at what level of income should the tax be applied but for argument sake let's say that unless you make $50,000 a year there will be no tax and everyone will be taxed equally on anything above that figure on a marginal basis, i.e. if you make $50,001 a year it's the $1.00 that gets taxed.

Now for this to work all would have to agree on the tax rate but that shouldn't be too hard. One just has to agree on how much the government is to spend in year one and that's it. Of course the other thing that has to happen is that there will be allowed NO DEDUCTIONS, CREDITS OR EXEMPTIONS. Therefore if you make $50,001 in our example and the tax rate is 10% your tax is a dime. If you make $5000,000 you tax is $45,000. If someone could tell me what isn't fair about that, I sure would like to hear from you. Corporations would require a bit more work.

Ok, to be serious, it would be a hell of a lot harder than outlined above. Just by example, the housing market which has it's underpinnings in the mortgage deduction would take a hell of a hit but if we are going to consider something this radical--and we should--now is the time from the standpoint of the housing market alone. Charitable gifts, education, medical expenses? Arguments can be made for all. But think of the benefits. Remove this nonsensical concept of class warfare which is a political creation pure and simple and one can begin to focus on those things that really count. Today, unfortunately, we are prvented from considering the best interests of the NATION by the Balkanization of various ethnic, racial and economic groups all for the benefit of narrow political interests. We self-rightously complain about the caste system in India or the religious divisions in Iraq while practicing the same type of stupidity in our own society. This must stop and at the top of this madness is our tax code if not designed to set one level of society against another, is certainly used in that manner. We would also remove the IRS, 50,000 tax lawyers and hoards of accountants. 'Tis a consummation devoutly to be wished.

Ok, got that off my chest. This is supposed to be a financial blog so we shall get back to that in the next few days with what we MUST do immediately or face a real mess that will make today's problems pale by comparison.