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LOOK AT IMPLICATIONS OF FLAT TAX

SHARE LOOK AT IMPLICATIONS OF FLAT TAX

I am concerned that many people, including a reader whose letter "Rise up in support of flat tax" was recently published on the opinion page, hear and support Steve Forbes' ideas on tax reform without really understanding all the implications of his proposals.

Forbes advocates both a 17 percent flat tax and reducing the number of tax deductions to simplify the tax code. Many assume that both of these will happen by simply switching to a flat tax. But in reality, the elimination of unnecessary or unfair deductions can occur without simultaneously enacting the flat tax. I hear many people advocate the flat tax by declaring the unfairness of the deductions for businesses or nonprofit corporations.This amounts, essentially, to saying that we should all eat apples because oranges taste good. While the eliminations of some unnecessary and unfair deductions is probably a good idea, this would have to occur separately from enacting a flat tax.

However, it is clearly not expedient to eliminate all tax deductions. Deductions for dependents should stay to help families with children, and the tax exemption on charitable contributions should also stay to encourage people to donate to the needy. If Congress is successful in scaling back welfare and Medicaid programs, we will need more charitable contributions, not less.

Furthermore, many people do not realize that Forbes' tax proposal favors only the taxing of earned income. This means that the wealthy who make their livings off of stock dividends, income from renting real estate or income from other investments would have to pay nothing while a middle-income white- or blue-collar worker would have to pay 17 percent of the income he or she earns.

Under this plan, low-income wage earners would be forced to give the same percentage of their incomes to the government that wealthy business tycoons would be required to give.

Laura Lawrence

Provo