---

 [ ARCHIVE ](https://www.citywatchla.com/index.php?option=com_content&view=category&id=16)

#  Here’s the Real Solution to Our Insane Tax Policy

![](https://www.citywatchla.com/images/stories/Sept-2011/cw9-76e.png)PERSPECTIVE - The value of Federal tax credits and other breaks topped a trillion dollars, almost equaling the tax revenue received, according to an excellent article in the Washington Post.

Written by Paul Hatfield.

September 22 2011

<a class="a2a_button_facebook"></a><a class="a2a_button_twitter"></a><a class="a2a_button_email"></a><a class="a2a_button_print"></a>[](https://www.addtoany.com/share)

![](https://www.citywatchla.com/images/stories/Sept-2011/cw9-76e.png)PERSPECTIVE - The value of Federal tax credits and other breaks topped a trillion dollars, almost equaling the tax revenue received, according to an excellent article in the Washington Post. [\[link\]](http://www.washingtonpost.com/business/economy/ever-increasing-tax-breaks-for-us-families-eclipse-benefits-for-special-interests/2011/09/15/gIQAgdjcaK_story.html?sub=AR)

Only 8% of the total went to corporations. Corporate jet benefits were a mere .03% slice.

I don’t like corporate jet write-offs any more than most people, but political rhetoric focused on relatively insignificant inequities in the tax code while ignoring the larger scope of the deficit’s origin is nothing more than pandering.

President Obama and Congress should be ashamed; we the citizens should admonish the lot of our officials and demand a real solution for the insanity that masquerades for tax policy. It is time to consider a flat tax.

The concept of a flat tax can mean many things to many people. In truth, no proponent of such a tax has ever proposed one that is purely flat.

I support a flat tax that kicks in above a poverty level. People can argue over what that level should be. Currently, it is defined as $22,350 for a family of four – way too low in the view of most people.

The poverty benchmark for applying a flat rate should be higher, but it must still be set to a level low enough to incent people to look for work.

There would be no deductions, exclusions or credits – period. They have become nothing more than tools to buy votes. The economic consequences of all of this well-intentioned largesse have been disastrous. The devastation in the real estate market is the most striking example…and the one with the most pervasive impact.

Everyone above the assumed poverty benchmark would pay the same rate for all sources of income: capital gains, social security, wages, interest – you name it.

Corporate income taxes should be replaced by gross receipts taxes set a low enough level to be factored into pricing strategies that do not constrict consumer demand.

It would no longer cost taxpayers to fork out $229 to prepare a 1040 with a Schedule A (more if other forms are required) and eliminate almost all of the 4 billion hours of time spent on preparing returns, not to mention reducing anxiety – the healthcare price of which is incalculable.

Corporate tax departments could be reduced, if not entirely replaced in smaller firms by less costly general accounting personnel.

The IRS could devote almost all of its audit and enforcement resources in smoking out tax evaders, including those in the cash-driven underground economy. It would also eliminate most simple calculation errors resulting from complex rules.

The GAO issued a[ report](http://www.gao.gov/products/GAO-11-747T?source=ra) in June 2011 that stated the tax gap for 2001 (that’s ten years ago) was $345 billion. The gap is defined as the difference between what is owed and paid on time. God knows what the price tag is as of the current year – and He or She does not work for the government.

Nina Olson, the National Taxpayer Advocate and a guest at one of the Cal Society of CPAs annual tax nights, states: “The causes of noncompliance vary, but simplifying the tax code could address many of them.”

What can be more simple than a flat tax?

(Paul Hatfield is a CPA and serves as Treasurer for the Neighborhood Council Valley Village. He blogs at Village to Village and can be reached at: phinnoho@aol.com ) –cw

Tags: flat tax, taxes, tax loophole, tax breaks, Federal tax credits, Barack Obama, Congress, corporate income, capital gains, social security, wages

CityWatch
Vol 9 Issue 76
Pub: Sept 23, 2011

 [ ![LA DWP #2 (Pay Your Bill Help)](https://www.citywatchla.com/images/LADWP/dwp%20level%20pay%205-7-25.jpg) ](https://www.citywatchla.com/component/banners/click/82 "LA DWP #2 (Pay Your Bill Help)")

 ![](https://www.citywatchla.com/images/banners/signup-for-cw.png)

## Get The News In Your Email Inbox Mondays &amp; Thursdays

 Message

 [ ![Home - HHR Rent is too High - SB-2](https://www.citywatchla.com/images/HHR/AHF-rent-too-high.jpg) ](https://www.citywatchla.com/component/banners/click/104 "Home - HHR Rent is too High - SB-2")

 ---

##  Featured CityWatch Stories

 [ ![](https://www.citywatchla.com/media/yootheme/cache/34/065h-34e1b43b.jpg) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33212:reminder-to-the-red-states-turnabout-is-fair-play&catid=395)

### [Reminder to the Red States, Turnabout is Fair Play](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33212:reminder-to-the-red-states-turnabout-is-fair-play&catid=395)

GELFAND’S WORLD - Indiana has been pounded by rains that resulted in widespread flooding. While the rain was still comi…

 [ ![](https://www.citywatchla.com/media/yootheme/cache/d8/066m-d8f0fac6.jpg) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33229:democrats-finally-tell-iowa-and-new-hampshire-you-dont-go-first-anymore&catid=395)

### [Democrats Finally Tell Iowa and New Hampshire: You Don’t Go First Anymore](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33229:democrats-finally-tell-iowa-and-new-hampshire-you-dont-go-first-anymore&catid=395)

GELFAND’S WORLD - Earlier in the week, the Democratic National Committee did something good. Mind you it wasn’t great…

 [ ![](https://www.citywatchla.com/media/yootheme/cache/d0/065o-d02f23ac.jpg) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33213:californias-empty-classrooms-are-a-warning-sacramento-cant-ignore&catid=378)

### [California’s Empty Classrooms Are a Warning Sacramento Can’t Ignore](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33213:californias-empty-classrooms-are-a-warning-sacramento-cant-ignore&catid=378)

A STUDENT'S VIEW - California is spending more on public education, yet classrooms are emptying, campuses are closing…

 [ ![](https://www.citywatchla.com/media/yootheme/cache/da/066j-daf22e28.jpg) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33231:a-prisoner-a-peacemaker-and-israels-defining-choice&catid=375)

### [A Prisoner, A Peacemaker, and Israel’s Defining Choice](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33231:a-prisoner-a-peacemaker-and-israels-defining-choice&catid=375)

P.O.V - Marwan Barghouti remains one of the most consequential—and controversial—figures in the Israeli-Palestinian con…

 [ ![](https://www.citywatchla.com/media/yootheme/cache/df/065q-dfb89383.jpg) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33224:john-mckinney-on-what-separates-the-city-attorney-candidates&catid=401)

### [John McKinney on What Separates the City Attorney Candidates](https://www.citywatchla.com/index.php?option=com_content&view=article&id=33224:john-mckinney-on-what-separates-the-city-attorney-candidates&catid=401)

INTERVIEW - Voters will have a clear and defining contrast in the goals and objectives of the remaining general electio…

---

##  [ ARCHIVE ](https://www.citywatchla.com/index.php?option=com_content&view=category&id=16)

 [ ![](https://www.citywatchla.com/images/stories/Apr-2018/034e.png) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=15339:early-intervention-and-jobs-are-key-to-stemming-chronic-homelessness-in-los-angeles&catid=16)### [Early Intervention and Jobs are Key to Stemming Chronic Homelessness in Los Angeles](https://www.citywatchla.com/index.php?option=com_content&view=article&id=15339:early-intervention-and-jobs-are-key-to-stemming-chronic-homelessness-in-los-angeles&catid=16)

### [Tucker Carlson and Gay Rightwinger Blame California Wildfires On Hiring LGBTQ People](https://www.citywatchla.com/index.php?option=com_content&view=article&id=18755:tucker-carlson-and-gay-rightwinger-blame-california-wildfires-on-hiring-lgbtq-people&catid=16)

### [Anti-LGBTQ Veep Just Can’t Stop Talking about Mayor Pete](https://www.citywatchla.com/index.php?option=com_content&view=article&id=17690:anti-lgbtq-veep-just-can-t-stop-talking-about-mayor-pete&catid=16)

 [ ![](https://www.citywatchla.com/images/stories/Apr-2018/033j.png) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=15316:news-pulse-corrupt-system-reason-for-not-voting-in-2018-majority-wants-more-than-two-parties&catid=16)### [NEWS PULSE: ‘Corrupt System’ Reason for Not Voting in 2018 … Majority Wants More Than Two Parties](https://www.citywatchla.com/index.php?option=com_content&view=article&id=15316:news-pulse-corrupt-system-reason-for-not-voting-in-2018-majority-wants-more-than-two-parties&catid=16)

 [ ![](https://www.citywatchla.com/images/stories/Jan-2016/1404d.png) ](https://www.citywatchla.com/index.php?option=com_content&view=article&id=10245:dead-dog-set-on-fire-sparks-fears-for-strays-in-los-angeles&catid=16)### [Dead Dog Set on Fire … Sparks Fears for Strays in Los Angeles](https://www.citywatchla.com/index.php?option=com_content&view=article&id=10245:dead-dog-set-on-fire-sparks-fears-for-strays-in-los-angeles&catid=16)
<div data-id="1" 
	class="eb-inst eb-hide eb-emailform eb-1 eboxContentLocker"
	data-options='{"trigger":"onPageLoad","trigger_selector":"","delay":3000,"early_trigger":true,"scroll_depth":"percentage","scroll_depth_value":80,"firing_frequency":1,"reverse_scroll_close":true,"threshold":0,"close_out_viewport":false,"exit_timer":1000,"idle_time":10000,"close_on_esc":false,"animation_open":"slideInDown","animation_close":"fadeOutDown","animation_duration":400,"disable_page_scroll":true,"test_mode":false,"debug":false,"ga_tracking":true,"ga_tracking_id":"G-P16BQ7X1SW","ga_tracking_event_category":"EngageBox","ga_tracking_event_label":"Box #1 - Global Email Signup Form","auto_focus":false}'
	data-type='popup'
	>

	<button type="button" data-ebox-cmd="close" class="eb-close placement-outside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>
	<div class="eb-dialog eb-formVer" role="dialog" aria-modal="true" id="dialog1" aria-label="dialog1">
		
		<button type="button" data-ebox-cmd="close" class="eb-close placement-inside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>	
		<div class="eb-container">
						<div class="eb-content">
				
<form action="https://citywatchla.us2.list-manage.com/subscribe/post?u=34d69f33624fd058ee9b56516&amp;id=4bfa422f51&amp;f_id=00d6c2e1f0" class="eb" method="post" id="mcform-1" name="mcform-1" target="_blank">
			<div class="eb-form-header"><p><img src="/images/2023/06/be-a-city-watcher.png" alt="be a city watcher" width="350" height="97" loading="lazy" data-path="local-images:/2023/06/be-a-city-watcher.png"></p>
<p>Sign up to receive our special e-news blasts on Monday and Thursday evenings!</p></div>
	
					<div class="eb-field-row">

			
			
			
			<input class="eb-input" type="email" name="EMAIL"  placeholder="Email address"  id="EMAIL" value="" required>

			
		</div>
										
	<div class="eb-footer">
    	<button class="eb-btn" type="submit" name="subscribe" style="background-color:rgba(93, 183, 93, 1);color:rgba(255, 255, 255, 1)">
    		Sign up    	</button>
    </div>
</form>			</div>
		</div>
	</div>	
</div>
<div data-id="3" 
	class="eb-inst eb-hide eb-yesno eb-3 "
	data-options='{"trigger":"onScrollDepth","trigger_selector":"","delay":0,"early_trigger":false,"scroll_depth":"percentage","scroll_depth_value":80,"firing_frequency":2,"reverse_scroll_close":false,"threshold":0,"close_out_viewport":false,"exit_timer":1000,"idle_time":1000,"close_on_esc":false,"animation_open":"fadeInUp","animation_close":"fadeOut","animation_duration":300,"disable_page_scroll":false,"test_mode":false,"debug":false,"ga_tracking":true,"ga_tracking_id":"G-P16BQ7X1SW","ga_tracking_event_category":"EngageBox","ga_tracking_event_label":"Box #3 - Yes \/ No Donation Popup Box","auto_focus":false}'
	data-type='popup'
	>

	<button type="button" data-ebox-cmd="close" class="eb-close placement-outside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>
	<div class="eb-dialog " role="dialog" aria-modal="true" id="dialog3" aria-label="dialog3">
		
		<button type="button" data-ebox-cmd="close" class="eb-close placement-inside" aria-label="Close">
	<img alt="close popup button" />
	<span aria-hidden="true">&times;</span>
</button>	
		<div class="eb-container">
						<div class="eb-content">
				
<div class="ebox-yes-no">
	<div class="ebox-yn-text">
		
		
		<div class="ebox-yn-headline" style="font-size:22px;color:#888888">
			<p>If you only give once a month, would you consider giving to CityWatch?</p>
<p>Your support fuels our mission to promote and facilitate civic engagement and neighborhood empowerment, and to hold area government and its politicians accountable.</p>
<p>Would you like to help? Even if you can only give $5, it will make a difference.</p>		</div>
			</div>
	
	<div class="ebox-ys-buttons" style="font-size: 16px;">
		
<a
					data-ebox-prevent="0"
		data-ebox-cmd="close"
				target="_self"
		href="https://www.citywatchla.com/donate"
		rel="noopener"
	
	
	
	
	class="ebox-ys-btn"
	style="background-color:#2ec664;color:#ffffff;min-width:100px">
	Yes
	</a>
<a
	
	
			data-ebox-cmd="close"
		href="#"
	
	
	class="ebox-ys-btn"
	style="background-color:#ef2345;color:#ffffff;min-width:100px">
	Not Right Now
	</a>	</div>

	</div>			</div>
		</div>
	</div>	
</div>