Fair Tax Or Fairy Tale? Pro-Con Would A Flat Tax Really Make Life Easier And Fairer, Or Just Make It Easier For The Rich To Get Richer?

And now for a Really Bad Idea! Favored by Malcolm “Steve” Forbes Jr., heir to a fortune worth between $90 million and $400 million. This Champion of the Little People wants to make your life easier by allowing you to file your entire income tax return on a postcard! Oh boy! Flat tax! I said, flat tax!

It starts with F, it ends with X, and it cuts the Internal Revenue Service right out of your life. It’s neat, it’s simple, it’s elegant. It whitens your teeth and cleans your breath.

Ever hear the story about the fellow who ran a used-car lot and couldn’t sell a car? Across the street was another used-car lot where the owner couldn’t keep a car on the lot. First fella crosses the street and says to the owner, “Look, I’ll give you $5,000 if you’ll just tell me what your secret is.”

“Done deal,” says the second fella. “Here’s how I do it. I hire a bunch of bee-you-tiful girls to come sit in my cars, and they go like hot cakes.”

First fella tries it, and sure enough, he’s sold out his lot by the second day. All he has left is a Model A, a real junker. A farmer who’s come to town for the Stock Show inspects the Model A, kicks the tires, slams the doors and then comes over and asks the owner, “Does the girl come with the car?”

“That’s up to her,” says the owner. Farmer buys the car, drives off with the girl and puts his hand on her knee. She says nothin’. He drives off to a shady side street, parks in a grove, puts his arm around her and his hand on her leg. She says nothin’. All excited, the farmer races the car down to the riverbank, where there’s nothin’ around, all dark and quiet, and puts the big question to her. She says: “No. You got that when you bought the car.”

Look out for this Model A flat tax, fellow citizens, because it is a lemon.

Why, what could be fairer, cries Steve “The Music Man” Forbes. You pay 10 percent of your income, I pay 10 percent of my income, we can both get it here on this itty-bitty postcard, and all have better sex lives to boot.

Sure, you pay 10 percent of your $10,000 salary and you have $9,000 left to live on. Forbes pays 10 percent of his $10 million income and he’s got $9 million left to live on, right? Wrong. The flat tax exempts all capital gains and interest income. Forbes pays zero. Earned income is taxable under the flat tax; unearned income is not.

You’re savin’ like Scrooge to buy all the house you can afford on $9,000 a year, and Forbes is livin’ in that nice New Jersey huntcountry mansion he got from his daddy. But hey, neither one of you gets to deduct mortgage interest payments, so ain’t that fair? Neither one of you gets to deduct for giving to church or charity, so ain’t that fair?

Suppose you’re a CEO, earning every penny of your $10 million salary, so you’ll be paying a big one mill to the treasury, right? Not unless you’re a fool. You’ll be arranging with your board to take every penny of your salary in stock options and bond income so you won’t owe Uncle Sam a nickel.

Now, such scholars of the economy as House Majority Leader Dick “Scrap Social Security” Armey say the flat tax will encourage rich folk to put their money into productive investments and the economy will grow. Hold that football, Lucy!

Forbes knows rich folks will invest their gelt productively because he watched his daddy, Malcolm, who inherited a lot of money and productively invested in the following: the largest collection of Faberge objects outside the Queen of England’s, including 12 Imperial Easter eggs; a collection of homoerotic art; the family plane named Capitalist Tool that Junior uses to campaign in; hot-air balloons with gold leaf on the gas bag; a chateau in France; five yachts; a bottle of Thomas Jefferson claret for $157,000; and his 70th birthday party in Tangier, Morocco, where hundreds of guests such as Henry Kissinger and Elizabeth Taylor were flown in, put up in a palace and entertained by 600 belly dancers, 200 cavalry guards and dancing camels.

Forbes mistakes his own best interest for the country’s.

I’ll tell you what a fair tax system is: a progressive income tax that starts at 0 percent until working folks pass the poverty level ($15,150 for a family of four), goes to a low percent up to median income ($37,000) and then rises along with income until it reaches 50 percent for the richest Americans. That would leave someone with an annual income of $10 million with a mere $5 million a year to live on, and if they can’t make it on that … and the horse they rode in on.

Molly Ivins is a columnist for the Fort Worth Star-Telegram.

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