Jan 222009

If you think Timothy Geithner has the right stuff for the job as Treasury Secretary – say yes to his nomination on the condition that he simplifies the US tax code. After all he would have NO excuse for his mistake on his tax return if things were simple – as they should be.

What has not been raised is the obvious. The tax code is laughably (if we can laugh about taxes) complex, if created from scratch to be in its current form only a lunatic could be responsible for such ridiculousness.

Cut out the crap…simplify.

A flat tax. A simple minimum amount anyone can earn without paying any tax on their initial income, then 12% (or similar suitable figure) on everything excluding obvious work expense or business deductions.

The result will be simplicity, a gain in revenue raised (this has happened every time a flat tax at a low rate has been tried), a vast increase in man-hours available for work more productive than for the calculation of taxes, a massive increase in incentive to work, to create, to start new businesses, to invest.

The number of tax officials and tax employees needed would fall, releasing them to more productive and creative employment, costs in paying tax advisers and tax attorneys would almost disappear and this would be a major contribution to national prosperity, to inspiration and enterprise.

So whether Timothy Geithner is confirmed or not – let’s understand this lesson and get some benefit from his error. Progress!

It’s simple…simplify!