One of the key goals of the Right Wing movement during the past decades is to implement a flat tax at the Federal level. In fact, Steve Forbes has made it his life's mission to champion the flat tax and he even made it the primary platform for his failed Presidential bids in 1996 and 2000. Here is a guy born on third base, has had everything served up for him his entire life and yet his life's mission is to make the richest 2% of the country richer...I digress...
Fortunately for Steve, I believe we will be having a version of the flat tax very soon in this country; however, it won't exactly be the kind of flat tax that Steve Forbes was envisioning.
Here is how the "modified" flat tax will come into being:
1) As I've indicated below, the U.S. government is now bankrupt and the economy is heading for depression. So raising revenues the old fashioned way through taxes, isn't going to be very popular or successful.
2) The U.S. will experience severe deflation as the banking system collapses and money supply (credit) dries up
3) In response to the downward deflationary spiral, the Federal Government will be forced to prop up the economy through a MASSIVE fiscal stimulus program, far beyond the Tennessee Valley project of the 1930s and orders of magnitude larger than the recently announced "economic stimulus plan".
4) In order to finance this program, the Government will turn to the Federal reserve for funding. The Federal reserve, under heavy political duress, will do their duty and credit the Government bank account with hundreds of billions of *new* dollars. Yes, just like that, at the speed of light, via electronic deposit...
5) With this massive increase to the money supply, the dollars already in circulation will be immediately diluted and therefore devalued.
The great news for Steve Forbes is that this new "tax" program will be "flat" to the extent that it affects everyone proportionally. As an example, if my $10,000 savings declined to say $9,000, then Steve Forbes' $1billion would be worth $900 million - we were both "taxed" by the same % amount.
And the best part is that under this new plan, you won't even have to fill out a tax return!!!
