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| The proponents of a flat tax on the gross income do seem to ignore the varying profit margins of different business activities. Even more they ignore the social guidelines the present convoluted tax code gives to producers, wage earners, and investors. Virtually ALL of the tax deductions are viewed as perks. And some really are, and were intended to encourage social responsibility. Like deductions for charitable contributions to encourage support of charities. Deductions for cost of employees and employee benefits to encourage hiring. Deductions for the cost of raw materials to encourage production of useful products. Deductions for the cost of raising children to encourage causing and raising children instead of causing and abandoning kids. Reduced rates for dividends to encourage investment in companies. Reduced or zero rates for interest from municipal bonds so investors will loan money. So much of the tax code is designed to encourage beneficial social behavior. A flat tax removes ALL those incentives making some rather useful operations like the low margins of most years of farming as well as the grocery stores too costly to continue to operate leading to hungry folks. Historically a hungry citizenship has changed the central government, and rarely peacefully.
Gerald J. | |
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