America’s incomprehensible web of tax laws and regulations is an abomination. No one can justify the complexity of the tax code, or the 75,000 pages it fills. Last year, Americans wasted more than $230 billion and spent 6 billion hours just to prepare our taxes. The myriad special-interest tax shelters and loopholes disproportionately benefit some citizens over others and encourage those with the resources to openly game the system.
We need to replace our tax code with a straightforward alternative based on simplicity, transparency and fairness. The solution is a clean, low flat tax.
A single-rate system levels the playing field and eases the burdens of compliance. It eliminates the labyrinth of deductions and preferences, as well as the inequities of increasingly punitive tax rates as taxpayers earn more money. Under the current system, the harder someone works to achieve the American Dream, the more heavily she is taxed. Under my flat tax, these disincentives for success will be removed and everyone will be treated fairly.
Here’s how: my plan calls for a simple 14.9 percent flat tax on all income. No deductions, no shelters, no loopholes. If you earn ten times as much as your neighbor, you pay ten times as much in taxes. That’s the deal.
To protect those rising from poverty, my flat tax only applies to income above 150 percent of the Federal Poverty Level – or earnings more than $36,375 for a family of four.
To treat everyone in America as citizen-owners, those whose income falls below this allowance will make a de minimis tax payment annually. Even Americans who earn little income should pay some taxes, no matter how small their contribution might be. Instead of living under a system where proposed tax hikes affect only a few, we must create a tax base that includes everyone.
Additionally, my plan taxes all income once, applying the same low 14.9 percent rate on personal and corporate income. Currently, our system taxes investment income once at the corporate level and then again at the personal level. This heavily discourages saving and investing, and punishes those who provide the financial “seed money” that is so vital for productive economic growth and job creation.
Under my plan, personal taxes on income from capital gains, dividends and interest will disappear. Those earnings will be taxed only at the business level.
Of course, many career politicians in Washington are eager to find new ways to extract more of Americans’ hard-earned money. Under the Carson Flat Tax, those days would be over.
The unsung heroes of our economy are the entrepreneurs who work hard and sacrifice to build small businesses and family-owned farms from Alaska to Florida. It is patently unfair to impose extra taxes on people who only want to pass along their assets – usually a small business that has been in the family for decades – to their children and grandchildren. Americans have every right to leave an inheritance to loved ones. My tax plan will abolish the affront and disgrace that is today’s “death tax.”
Unlike the proposals of other Republican presidential candidates, the Carson Flat Tax does not compromise on deductions or waffle on loopholes. It puts an end to the divisiveness of preferential treatment and exclusions that are part and parcel of current tax regulations. Our government should not try to steer people into taking out mortgages or making charitable contributions through the tax code. Individuals can decide for themselves whether it makes sense to buy a home or donate money for their local house of worship. If Americans are allowed to keep more of their own earnings, they can be more generous when the collection plate comes around, not less. Charitable giving originates in our hearts, not on our income tax returns.
Renewal of the U.S. economy depends on Americans themselves, not on the edicts of the Internal Revenue Service.
Over the next decade, my plan will lead to more than 16 percent economic growth above current projections. I am confident the economy will grow by almost 4 percent a year, more than 1.6 percent above current estimates.
The increased business investment will lead to expanded production capabilities and more job opportunities for American workers. Nearly 5.3 million new jobs will be created over 10 years – that’s an additional 44,000 new jobs each and every month. Moreover, wages are likely to increase by nearly 11 percent during the same period.
In short, the U.S. economy will boom under the Carson Flat Tax. By replacing the current complex, burdensome system with my simple, transparent and fair tax plan, every American will gain and our country will prosper.
Ultimately, we, the people, must all resolve to help our nation return to greatness. Ours is a land of opportunity where no one is permanently consigned to poverty, individuals can pursue their dreams and everyone has the freedom to make choices in their own best interests. My plan will unleash the enormous potential of Americans to build a better life for themselves and their families.
Dr. Ben S. Carson, a retired neurosurgeon, is a Republican presidential candidate.