The Flat Tax

Even if it were to happen, it would be all of two weeks before Congress introduced some exemption to favor some group or another.

I'm a CPA and using the argument that CPAs, lawyers, IRS agents, tax preparers, would lose jobs is a terrible argument against a flat tax.

The economic boon from every American not having money siphoned off by the income tax and the industry based on it would be enormous, creating new PRODUCTIVE jobs in every other industry.

It would most definitely have a major impact on the profession, but a selfish desire to protect CPA provided income tax services at the expense of the economy as a whole is not a good argument against a flat tax.

They should do a progressive tax, but no extra steps. No deductions, no difference in capital gains. Just a one step plug your total yearly income into a IRS website calculator and presto you're done. Would not necessary increase burden on certain income class, at least much.

All those bright future CPA's need to focus their talents to do something that actually produces something.

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I have not yet seen a flat tax proposal that would realistically produce the same revenue that our current structure provides.

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This is the major sticking point IMO. It's near impossible to do without raising taxes on the middle class.

I'm a CPA. I don't think it would effect those in Public very much at all anyway. Most of the clients for the tax department were not individual returns anyway

If anything, we would have to hire more CPAs than what we have to help adjust for the flat tax.

Just about every CPA employed by my fortune 500 employer would be fine since their job isn't to get people out of taxes

The strongest argument against the flat tax I have heard is it hurts the poor the most. Since they spend the majority of their income on extraneous items, they would be taxed at a higher rate than others since middle- and upper-class do not spend as much of their income percentage wise.

This argument to me is weak, though. I believe the elimination of the IRS would be simple and more fair. Also, people would feel safer knowing that April 15th is not some fricked up surprise.

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I'm a CPA. I don't think it would effect those in Public very much at all anyway. Most of the clients for the tax department were not individual returns anyway

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Exactly - the percentage of time CPA's spend on individual taxes is not highly significant.

Flat tax doesn't change the corporate arena where the vast majority of CPA tax work is done.

H&R block get affected significantly? Yes. The CPA profession, not quite so much.

Responding while waiting for 968 pages of tax return to print...

Here is what you have to think about.

1) The tax code as currently written curries favor. It favors some industries and penalizes others. This provides congress with a large base of power. To go to a flat tax would require congress giving up that power. When is the last time you have seen a politician willingly give up power? This is why I think the flat tax will go nowhere.

But even if we got some new congressmen in who voted to pass it...

2) It doesn't do anything for entity returns. A flat tax would mean the end of passthrough taxation, so all businesses would have to be taxed as a C corporation (or something new created that is similar). If there is hardly any chance of a flat tax for individuals, there is no chance at all for a flat tax for businesses.

3) You still have a large majority of states who tax income. Just because the feds go to a flat tax doesn't mean the states will.

4) You still have international taxation.

Most CPAs who work in taxation would not be affected much at all. H&R Block and the like would go out of business, but they are not really employing CPAs.

Most tax CPAs provide value by helping businesses decide what is and what is not taxable income, and what is and what is not a deductible expense. If individual taxation went away, I would not miss it one bit.