During presidential primaries, we expect candidates to talk about their big plans for moving the country forward and addressing the nation’s most pressing issues. We expect soaring rhetoric based on so-called traditional ideals. Discussing the world in right v. wrong extremes is much easier than conceding that there are myriad shades of gray and that actual governing and policymaking is always easier in theory than it is in practice.
So, you can’t blame Republican presidential candidate Dr. Ben Carson, polling at second just a few percentage points behind current frontrunner Donald Trump, for touting a tax plan that would replace the nation’s current tax system with one based on tithing. Regardless of religious or secular affiliation, most of us understand the biblical concept of giving 10 percent of our income to religious authorities.
During the first GOP primary debate, Carson said under his 10 percent flat tax “tithe” plan, “[y]ou make $10 billion, you pay a billion. You make $10, you pay one.” Sure, it may sound easy, but it is utterly unrealistic, and, based on the limited details he has released, it would fail to raise enough revenue to fund Social Security, unemployment and labor programs, let alone the entire federal government.
Carson has never specified whether his plan would actually include all income or exclude capital gains incomes, as many other tax proposals do.
Without specific details, Citizens for Tax Justice (CTJ) Director Bob McIntyre made a generous estimate of how much Carson’s 10 percent flat tax could reasonably raise by simply multiplying total federal adjusted gross income estimated for 2016 ($11.25 trillion) by 0.10. This would yield tax revenues of only $1.1 trillion. The Office of Management and Budget (OMB) estimates that the federal government will raise an estimated $3.5 trillion and spend $4 trillion in 2016. In other words, Carson’s plan likely would raise only 32 percent of the revenue of the current tax system and pay for only 28 percent of estimated government spending.
Further, McIntyre said, arguing the U.S. Tax system could be based on tithing misrepresents how societies functioned during ancient times. “Tithing was instituted to support the church," he said. "But there were also taxes to support the government, too -- pretty heavy ones during the Roman ascendancy.”
But Carson is sticking to his guns, stating that he has talked to economists who said with enough loophole closing a workable tax rate would be “somewhere between 10 and 15 percent.” However, our calculation demonstrates that even with every deduction eliminated, Carson’s 10-percent flat tax would increase the deficit by $3 trillion in just one year.
Even if Carson increased the rate of his flat tax, it would still be bad policy for the nation. Flat taxes plans are generally regressive. A CTJ analysis of one revenue-neutral flat tax plan found that it would raise taxes on the bottom 95 percent of taxpayers by an average of $2,887, while cutting them by an average of $209,562 for the richest one percent of taxpayers each year.
Carson is not alone among the Republican candidates in advocating some form of a flat tax. Ted Cruz, Rand Paul, Mike Huckabee, John Kasich, Rick Perry, Bobby Jindal, Lindsey Graham, and even Donald Trump have either endorsed or said that they are considering proposing a flat tax system. The only candidate to specify his flat tax plan with any detail is Sen. Rand Paul, whose plan would blow a $15 trillion hole in the budget over the next ten years, according to CTJ’s estimate. But Carson’s 10-percent plan would cost far more than even Paul’s proposal.