During the February 3 edition of Fox News' Glenn Beck, Wall Street Journal columnist John Fund suggested that the United States implement a flat tax, falsely claiming that “Hong Kong has had a flat tax for over 50 years and has had the fastest economic growth of any country in the world over that period of time.” In fact, Hong Kong's system for taxing salaries features multiple tax brackets, with differing marginal rates for different levels of income. After host Glenn Beck stated, "[M]aybe [the United States] should simplify the tax code," Fund responded in part by falsely claiming “Hong Kong has a flat tax for over 50 years,” adding, “Twenty countries have gone to the flat tax. Maybe we should learn something from them. Maybe we should learn that simple is better. More complicated only helps those who have riches to hire accountants.”
As Media Matters for America has noted, Hong Kong's system for taxing salaries includes four tax brackets with progressive marginal rates, as well as personal allowances for individuals and their dependents, and consists of progressive tax rates for income over and above eligible allowances and other deductions, such as home mortgage interest, self-education, and elderly residential care. Hong Kong also has what is called a “standard rate” for taxation, currently 15 percent as of 2008-09, which is paid by filers whose assessable income after deductions exceeds a certain level; that level is based on the filer's marriage status and number of dependents. According to the 2007-2008 annual report of the Hong Kong's Inland Revenue Department, there were 36,706 standard rate taxpayers that year, representing 2.8 percent of all taxpayers.
As Media Matters noted, in a February 28, 2005, column on The Wall Street Journal's OpinionJournal.com, Fund falsely claimed that “almost everyone in Hong Kong pays the flat tax.”
From the February 3 edition of Fox News' Glenn Beck:
BECK: OK. So, John, here's the thing that I want to know. If this is -- I said yesterday that I think Obama should give the speech and say, “You know what? It looks like to me nobody's paying taxes, and before I send the IRS agent to your house, I'm going to send them to my house. It starts at the White House and then we go to everybody on Capitol Hill -- find out who's paying their taxes and who's not.”
And if we find out that people are really criminal and they're doing things to -- I mean, I finally figured out why liberals don't mind taxes; they ain't paying them. If we find out that nobody is paying their taxes or they're all faulty -- it's either that they're tax cheats and those people will pay and maybe go to jail -- or that maybe we should simplify the tax code, because even Charlie Rangel can't figure this thing out.
FUND: About 20 countries have done that: every country from Estonia, which is one of the former Soviet republics, to Romania, to the Soviet -- the old Soviet Union, now Russia. Hong Kong has had a flat tax for over 50 years and has had the fastest economic growth of any country in the world over that period of time.
Twenty countries have gone to the flat tax. Maybe we should learn something from them. Maybe we should learn that simple is better. More complicated only helps those who have riches to hire accountants.
BECK: Yes, it's unbelievable. Thank you very much. OK.
FUND: Thank you.
