Is the charitable tax credit compatible with a flat tax?
Some proponents of the flat tax believe that a charitable tax credit is not compatible with a flat tax. The purpose of the flat tax, they argue, is to simplify the tax code, and a charitable tax credit adds unwanted complexity. While simplicity is a worthy goal, there are other goals that make the two ideas compatible. How can the argument for a charitable tax credit be reconciled with that for a flat tax? The answer depends in part on the goals of each. Generally, the goals of a flat tax are threefold: (1) to simplify reporting and collection, (2) to flatten the rate structure and (3) to eliminate the double-tax feature of the existing tax system. All three goals are intended to advance the broader goal of increased economic efficiency and growth. Generally, the goals of the charitable tax credit are: (1) to shift the delivery of welfare benefits from the public to the private sector, (2) to effect a redistribution of income from the nonpoor to the poor in a fashion superior to the cu
