Your editorial "Time to flatten tax code" confounds two distinct elements of the tax code: the progressivity of tax rates, and the complexity of the tax code. This is such an elementary and fundamental distinction, obvious to anyone who does their own taxes, that I can only conclude that you must have someone do your taxes for you. Let me explain it to you.

A progressive tax increases in rate as income goes up. It is based on the principle of ability to pay: those who have greater income can afford to pay a greater share. Even you seem to recognize that some progressivity is desirable, allowing that a family with two children earning $10,000 per year should get a break on their taxes (although this is a rather miserly standard: such a family makes less than 50 percent of the poverty threshold - $21,834 according to the Census Bureau). Our tax code is only modestly progressive. As you note in your editorial, the top 60 percent of income provides 70 percent of taxes, a not very great disparity from a flat tax. As anyone who does their own taxes knows, this modest progressivity causes absolutely no difficulty in determining the tax due. If you have a taxable income of $100,000 a year or less (as do more than 85 percent of American households), you just look it up in a table that accompanies IRS Form 1040. If you make more, it requires precisely one multiplication and one subtraction to figure your tax. So progressivity has nothing to do with complexity, and a flat tax would not change the complexity of the tax code. What a flat income tax would do is make the tax code actually regressive (lower incomes pay a greater share), because the Social Security tax applies only to the first $102,000 of income.

So where does the complexity come from? Deductions and the differential treatment of types (not amounts) of income. Which deductions are desirable can be argued, but it is clear that basic fairness requires at least some: a tradesman should be taxed on the profit from his trade, not his gross income, and so his business expenses must be deductible. But the greatest complexity arises from differential treatment of types of income. The tax code has been written to favor, in complex ways, the income of investors, and to disfavor (that is, tax at a higher rate) the income derived from wages. Thus if I am a plumber, I pay the standard (and higher) tax rates; but if I own stock in a plumbing company, I pay special and lower rates on my gains. This favoritism toward investors is perhaps the social engineering of which you complain.

The complex calculations and record keeping needed to distinguish long-term and short-term gains, ordinary dividends and qualified dividends, the portion taxed at 15 percent, etc. - this is what makes the tax code maddening. The greatest simplification of the tax code, which does not require a flat tax, would be to do away with the special and favored treatment of investors, and to treat all income, whether wages or investments, equally.

Before you write another editorial about the tax code, I suggest you might take the trouble to know something about it, or, at least, consult someone who does.

Gregory C. Mayer

4020 Kinzie Ave.