Announcing his 2016 presidential run at Liberty University last month Ted Cruz the first out of the starting gate excited fiscal conservatives with his call for a flat tax to replace the IRS. Support for the concept has been picking up steam recently due to the IRS targeting conservatives becoming the selected enforcer of ObamaCare and the increasing unfairness of the existing tax system hitting some Americans worse than others during the brutal economic downturn. During the 2012 election Republican candidates Herman Cain Newt Gingrich and Rick Perry all called for a flat tax.
Instead of a tax code that crushes innovation and imposes burdens on families struggling to make ends meet" Cruz said to loud cheers imagine a simple flat tax that lets every American file his or her taxes on a postcard. Imagine abolishing the IRS.
While there are some libertarian idealists who prefer to switch to the Fair Tax" replacing the IRS with a national sales/consumption tax pragmatists know it would never work. The entrenched establishment in Congress would never completely eliminate the IRS but would instead merely add a second layer of taxation to the existing system. Getting the mortgage industry to agree to eliminate the mortgage interest deduction for example will be a tough battle. The only way to really eliminate the IRS is to set up a competing system that cannot coexist with it. Not to mention that a consumption tax would disproportionately affect the poor and middle class who spend more of their incomes than do the wealthy.
Read the rest of the article at the Selous Foundation for Public Policy Research