Wednesday, December 06, 2006

Steve Forbes

I had a busy day on Monday. As well as a client meeting in Preston and my nightmare train journeys, I had to be back in London to a deadline in order to make another business meeting.

Following that particular piece of stress (the return train was also delayed), I just had time to whizz across to London's Clubland (that's St James's, not Vauxhall...) to attend a talk being given by Steve Forbes, the Editor-in-Chief of Forbes magazine and two-time candidate for the Republican nominee for president. I went along with Andrew, who has also blogged about it.

Although my primary reason for going was the topic (his argument for the introduction of a flat tax), I must also admit that the chance to hear someone who got pretty close to running for president speak is not something that happens every day.

My mind is not made up on the flat tax and I'm not sure he advanced any arguments I hadn't already heard. However, the evening was still a big success and this was down to his mind-bogglingly large knowledge of economics and politics around the world.

The depth of his knowledge was astounding. He out-argued knowledgeable Brits on subtleties of early-eighties British politics and was able to give wide-ranging answers to questions that compared and contrasted the situations in multiple countries in multiple continents without sounding like he was showing off or trying to make cheap points.

The event itself had an interesting format. The host (from The London Junto) clearly knew a lot of people in the audience (e.g. Eamonn Butler from the ASI) and brought them in from time to time to add their perspective. I didn't warm to that approach at first but, with hindsight, I could see that it added a dimension to the discussion that is lacking when the audience is entirely anonymous.

All in all, an interesting evening.

[EDITED 2006-12-08 09:16. I spelled Eamonn Butler's name incorrectly - now fixed. He has blogged about the event here.

4 comments:

Chad Sargent said...

The flat tax is a step in the right direction, but it is not a permanent or effective solution.

We started out with a simple, one-rate tax, which grew into a complex maze of thousands of pages of code and multiple brackets. We simplified that code in 1986, reduced it down to two brackets, and eliminated most of the loopholes and many deductions. Today, 20 years later, the code is as complex as ever, with over 66,000 pages, and 5-6 brackets. Most of the loopholes are back. Control is on government’s side, with considerable lobbyist influence. If we adopt a “flat tax” we will see the same results within a few short years.

There is a better choice.

The ultimate solution is to simply eliminate the entire code and all the income-based taxes and replace it with a single-rate tax with a consumption base. This puts control on the peoples’ side, where the Founders intended it to be.

The FairTax is such a replacement plan; it's the only plan of its kind, with extensive research and development by private-sector economists. The research and information is available at FairTax.org, including direct rebuttals to excerpts from Forbes' book, The Flat Tax Revolution.

Let’s not allow history to repeat itself. The only effective tax reform is total replacement with the FairTax.

Chad Sargent
FairTax Volunteer
Raleigh, NC

chadsargent.blogspot.com/

Richard Brown said...

Hi Chad,

Thanks for the comments.

I hadn't heard of the FairTax before now.

I agree that, even with one-off simplifications, tax codes will only ever show a tendency toward increasingly complexity if politicians are involved... it's just the nature of the beast.

What I don't understand about FairTax is: what is there to stop complexity creeping in there, too? (e.g. an "Earned Income Groceries Credit" or some sort of "rebate" on certain kinds of consumption?)

chadsrnc said...

Hi Richard

Your point is well taken; Congress loves to tinker and make simple things complicated.

While there are no guarantees, we do have safeguards against unwanted changes to the FairTax: the watchdogs in Congress, particularly John Linder, the author of HR25, the FairTax bill, and watchdog groups outside Capitol Hill.

The FairTax is concerned only with spending, so EIC and similar issues (based on income) will not surface. The FairTax legislation shuts down the sections of the tax code that define and implement all income-based taxes.

Since the prebate is designed to completely, fairly and uniformly un-tax the poor, no additional measures will be necessary under the legislation.

Since the FairTax relieves business of federal taxation, the tax lobbyists on K street (which account for over half the lobbyists in DC) will have to find other work; their services of obtaining tax breaks for their employers will no longer be needed. There's one less source of interference with the FairTax bill.

Your point is well taken, however. The FairTax grassroots and watchdog groups will be watching.

All the information about your concerns is available at www.FairTax.org.

Thanks again for your comment!

Chad

Richard Brown said...

Agreed.... vigilance really does need to be the watchword!!