It seems as though it is impossible to get elected by leveling with the American public and having a rational discussion about whose taxes may be raised in the future. So in lieu of being direct with the electorate, we seem to get caught up in sloganeering about the "middle class" and "the rich."

Both candidates hope to get elected by protecting the middle class from tax increases, but no one can seem to agree on who is a member of the middle class. Therefore, it should come as no small surprise that an overwhelming number of Americans consider themselves neither rich nor poor but members of the middle class.

In an appearance at the Saddleback Church in Lake Forest, CA, both candidates were asked to identify the income level at which you migrate from the middle class to being rich. Their responses revealed not only deep divisions in the country about who should be paying for America's bills, but also the adversarial nature of not only our tax code, but our tax policy. The fact of the matter is, it is impossible to define, with the precision required by the tax code, what a middle class or a rich individual would look like. In other words, approaching the task of raising revenue from the current perspective is not only futile, but inherently unfair. Here's why.

Our system is said to be progressive. The more income you make, the higher your tax rate. However, within the progressive system are innumerable deductions, credits and exemptions that can help sophisticated (read wealthy here) taxpayers "legally" minimize their tax liability with the assistance of high priced tax counsel. So the illusion that we have a fair and progressive tax system is only true if we eliminate all of the exceptions to progressivity. Neither candidate seems interested in going there.

So who is this arrangement most unfair to? You've got it, the vast middle class who may not have access to the investment or business oriented tax breaks that their more wealthy fellow citizens enjoy. And following this line of thinking down the food chain, believe it or not, the most disenfranchised citizens are the poorest who do not file tax returns. The reason is because the government currently, and Sen. Obama prospectively, offer a raft of what we euphemistically call refundable tax credits. These are payments from the government to people who have actually paid no income taxes. It is a redistributionist means of driving federal tax dollars to those perceived by Congress to be most in need. Unfortunately, these people need to file a tax return in order to collect and for varying reasons, few of them file. As a practical matter, the refundable credits can be arcane since most tax practitioners do not deal with them, making the process of driving Federal aid to the needy more porous.

We should stop wasting our time trying to determine who is rich or not and adopt a flat tax system, with very few if any deductions in lieu of our current progressive tax code. Everyone pays the same rate if you make more, you pay more in tax. For low income citizens, we can adopt a standard deduction which can eliminate the estimated 40% of Americans who pay no income taxes at all.

The greatest inequity of our present tax code is not the treatment of rich versus the middle class, but the mind numbing complexity which encourages everyone to do the wrong thing because everyone else is doing it. Guys, we can do better.

Listener-Commentator Anthony Ogorek is principal of Ogorek Wealth Management in Williamsville.

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