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 MediaNomics

What The Media Tell Americans About Free Enterprise
 

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Friday, June 2, 2000

Volume 8, Number 11

Kudos... to The New York Times

Simplifying the maddeningly-complicated, multi-layered federal tax code is a cause long championed by free market reformers. Now, The New York Times editorial page -- heretofore a flat-tax foe -- has picked up the cause. On Sunday, May 28, a Times editorial pushed for a flat tax, but not for the United States. Instead, the Times endorsed a flat tax proposal pushed by Russian President Vladimir Putin for his country, but used arguments that strongly echo those of flat tax supporters here in the U.S.

"By radically simplifying the code and slashing rates, Putin hopes to raise collections by cutting down on the corruption that has left his government starving for revenue," wrote the Times editors. "Many in the country, including the Communists, want to hold on to progressive rates. But in a society where few people pay anything close to their legally required taxes, and wealthy individuals often pay no tax, the idea of a progressive tax code is an illusion."

"By cutting rates and simplifying the code, Mr. Putin hopes to encourage people to pay taxes and make it easier for the government to track down those who do not. If Mr. Putin has the will, a flat tax makes a crackdown feasible. A flat tax can also cut down political corruption, removing layers of subsidies in the code that officials like to shower on favored constituents," the editorial added.

In this country, as economist Bruce Bartlett noted recently, "the wealthy seldom pay the high marginal tax rates imposed on them" by the current progressive tax code. Instead, they pay armies of accountants to find legal ways to shelter income from the tax collector. In a recent column, Bartlett quoted IRS statistics showing that 1,189 Americans with gross incomes above $200,000 paid no federal income tax in 1997.

In its editorial, the Times accurately noted that "it will not be easy to make the flat tax and other reforms work. Corruption and bureaucratic incompetence will not disappear overnight." Of course, that just makes it more important to start enacting reforms as soon as possible. Kudos to the New York Times editors for standing up for the idea of a flat tax with arguments that should resonate within the U.S. as well as in Russia.

Rich Noyes

 


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