Making New Flat Tax a resolution for 2012

The new year arrives with solemn prayers for peace on Earth and good will toward all, but also with memories of Christmas bills to pay and the first wisps of worry over the annual irritation of filing income taxes. One hesitates to mention tax filing in this season of good cheer. But this is also the season of hope, and there is good cause for hope that relief from the Internal Revenue Service tax code may finally be at hand.

Hope for tax reform arrives in two messages. In the first are words including “momentum,”“need,” “jobs” and “China.” Not much hope there individually, I grant you, but put the words together and for the first time in many years tax reform is really, truly on the national agenda. Not because the tax code is so complex or frustrating, though it is both of these things. As the last 25 years have demonstrated, popular displeasure is not enough to force Washington to act, except around the edges of the tax code.

No, the prospects for tax reform are rising because policymakers of all political stripes finally accept that the current code slows wage growth and it makes it harder to compete with tough new players like China and India. Interesting, is it not, how a long period of very high unemployment can focus a politician’s mind on the real tasks at hand?

The second message outlines a truly new tax reform plan called the New Flat Tax. Released in outline last May, this proposal is described in detail in a paper just out at the Heritage Foundation called “The New Flat Tax - Easy as One, Two, Three.”

As the name suggests, the New Flat Tax harkens back to the traditional flat tax, but goes far further toward comprehensive reform and simplification, much as the new Apple iPhone 4S builds on - but is light years beyond - the old rotary dial telephone. ...

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