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Can A Flat Tax Work?

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    The Wall Street Journal’s Stephen Moore discusses the likelihood of major American tax code reform.

  • Duration 5:06
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Is Wall Street Journal senior economic writer author of who's the fairest of them all -- Steve Morris -- -- -- fair and and Steve -- -- you you hang out that town.

Any hope of ever seen this.

Yes there is actually you know I think that you have to have all the stars align right you have to have -- -- kind of -- -- I you're right I've been in this how -- time I was here back in 1986 when President Reagan he didn't get this to a flat tax we got -- to do.

Very low tax rates and he.

Broaden the tax base got a lot of rid of all the termites in the tax system that.

That that.

You know call me crazy but I think the day is getting very soon.

That we are going to just blow up the whole tax system and start over.

With something very similar to what senator Lee was talking about because it's a matter of jobs and competitiveness if we want America.

To be -- economic superpower over the next 51020 years we need to have a world class tax system I don't think there's anybody.

Who believes this is a tax system that is built the last adult to compete dog right by you know you're speaking I'm in the in your choir right -- meant absolutely on board with this thing had yield -- -- numbers have you seen any calculations as do.

What that number would be.

Sure let let me get a couple numbers what is.

Let's say that she just got rid of everything all the little pulled all everything all the credits all the loopholes on the carve outs.

Everything in the tax code and you just tax everybody straight right out of their income.

Believe it or not you could have a flat taxes low as thirteen or 14% if you did that.

Now that would mean no deductions whatsoever if he had some deductions and for lower income people -- for that things that they really -- care about.

You -- you could do this at a rate of about nineteen or twenty -- -- And that's protecting people below the poverty level so they wouldn't have to pay income tax but I agree with senator -- I I think we need the tax system where everybody kind of except the very for everybody pays something I think a big deficiency.

And our current tax code is that 40% of Americans pay no income tax I have a -- problem with that I'm I'm very appetite taxes you know we talk a long time.

But I don't like the idea a lot of people are back fill out their tax form an opinion zero -- government is them -- about.

Well I'll -- but I'll share when you might favor my favorite is a consumption tax to that doesn't run penalize you for making money.

And then also I've heard -- -- -- it encourages savings but.

It if you go through there's always an argument against every single one of these ideas on the argument against a flat tax to one that -- -- we've heard.

Is that it's regressive which goes to your point about the fact that.

A rich person buys something for a dollar they paid thirteen cents a -- person buys something for a dollar they pay thirteen cents it's always been the hang up with a flat.

Tax.

That.

-- let me respond -- that it almost makes me angry when people say that that -- -- the flat tax or by the way I'm with you like it if I could -- may it wave.

A wand and fix the system I would go to a national sales tax yeah because that is.

It up taxing people what they take out of the economy not what -- put it but let's just let's talk about this issue about all of this is gonna hurt the -- How is there any tax system that you could think of that -- hurts the poor more than the one we've got right now.

And -- -- twenty million people unemployed in this country you can't find full time jobs we've got a persistent poverty problem where the property rated in this country is growing why is that because we don't have an economic -- system.

And I believe it's the tax system and by the way I would make the case -- -- the people or hurt the most.

By this god awful taxes we have right now are the people the very bottom so what we got right now is extremely regressive yet -- -- I totally agree but you've heard the argument and that's the 110 -- the one that you're gonna candidate to overcome that's the one that people are going to be -- well.

I know and you know in this town you will have people talking about not just you know the president saying -- raise the rates back up the 4045%.

You've got some Liberal Democrats wanna go back up 5070.

Hundreds of people talk about going back to 90% yeah tax rates selling nobody -- you know -- paid 90% that I don't all the secret.

You know I got such a great point in I was just looking at the numbers -- the 1950s the people's.

All the economy grew so much back down -- -- 90% tax rate you know that only a few hundred people were even in the tax scatter and for the vast majority of Americans.

They actually have a lower tax rate then that Americans -- of.

I know that I always like to -- the Donald Trump in this but at this point where he stated after the 86 act he says.

Give me back my 70% tax rate give me back my deductions because -- act like we've got on got a much better deal out of it with all of that so.

Yeah the way back there but in the 1950s the rich paid actually a smaller share of the taxes than they attacked them again today perhaps the exactly the flat tax we've got to do this bubble -- talking about it always appreciate your your viewpoints -- Steve -- thank you very much.

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