What is a Flat Tax?

The BeanCounter Blog has done a great job summarizing the main points expressed in a Flat Tax.

The main theme is that instead of paying for taxes out of your pay stub and then settling up at the end of the year, taxes would be applied to you as you spend. This means an additional tax on everything you buy. The rate being thrown around is 30% in addition to any sales tax. But opponents say that the percentage will probably be closer to 40. Shocking huh? 40%?

But really when it comes down to it the Flat Tax doesn't do anything new Those sneakers cost you more than the sticker price and sales tax you paid because you're paying with after tax money. So, those $75 shoes cost you the sales tax, the state tax (if you have it), and then the federal tax out of your paycheck. So you're paying 30-40% anyway. To me, it seems that the Flat Tax will just shift this tax around so that instead of being split between point of sale and pay stub, everything will be at point of sale.

But don't worry. This plan has as much hope as universal health care does. In essence it's a moot point and although it makes a nice platform, it's an unrealistic goal. And what's a goal if it can never be attained? A pipe dream...