Tired of going through the agony of income tax season? Consider the alternative maximum tax, or “max tax.” Instead of paying the regular income tax that’s regulated by a befuddling, menacing and often absurd multimillion word code, a taxpayer can simply opt to pay a flat 20% tax on gross income.
Thus, the choice is the max tax or taxed to the max.
The idea comes from Stephen Moore, president of the Free Enterprise Fund and a senior fellow at the Institute for Policy Innovation.
Of course, a lot of taxpayers wouldn’t mind seeing an even lower rate. It’s tough to justify the taking of one-fifth of anyone’s income, especially when there are so many other taxes to pay.
Rather than force a flat tax on America, the max tax would give individuals—and corporations—an option. Those who would fare better under the current system could continue filing as usual. But those who would benefit from a flat tax, either because they want to avoid the time-consuming hassle of filling out the 1040 and all its worksheets, forms, schedules and impossible-to-interpret instructions, or because they would pay less in taxes, could use that method.
Who could oppose such a sensible plan? The special interests that infest Washington, of course. It would give them less power and cut into their income, both of which they get from carving out deductions, credits and exemptions in the income tax code.
The max tax wouldn’t end or cut a single one of those tax breaks. If Americans really want a complicated system to ensure they retain their tax breaks, they are free to do so. But color us skeptical. We think that Americans will flock to the new system.
The economic benefits of the max tax would be enormous. Compliance costs (probably more than $200 billion a year) and hours lost to preparation (5.8 billion hours a year) would be cut, which would lead to an increase in productivity.
Sounds like a viable plan to us—and it didn’t even take a commission to come to that conclusion.