Flat Tax

First off, there are many people who do not even know what a flat tax is. By definition, a flat tax is described as, “a very precisely defined and coherent tax structure: a combination of a cash-flow tax on business income and a tax on workers’ income, both levied at the same, single rate” (Keen 4). Now, this just means that every person and every business, no matter the income, would be taxed at the same rate. Realistically speaking, when people talk about taxes, it is a matter of who wins and who loses. If we decided to adopt a flat tax system, people of lower income families would be suffering, “Under the flat tax, low-income households would lose because they now pay no income tax and are eligible for a refundable EITC of up to $3,370” (Gale 155). With this being said, the families of higher income would actually be thriving of a system

The use of flat (proportional) tax rate seems like a fairer option in my opinion. The reason why I think this is because we talked in class that the more money you make the higher your tax bracket is requiring the rich to pay more and the poor to pay less in comparison. This is causing companies to go overseas rather than staying in America which in effect could cause less jobs in America in general. Secondly, I feel that it would make a simple system and allow everyone to know exactly how much their going to pay for taxes.

Did you know that an astonishing 43.4 percent of the people in America do not pay any income taxes" (McCullagh 1)? This is roughly 65.6 million people that aren't paying taxes and this is putting our economy and country at its breaking point. Our current tax system penalizes those that work and save money. People that pay no taxes still get to enjoy the benefits. The United States needs to look at which tax is fairer to the people and easier to administer by the government. Although some may disagree, the Flat Tax should replace the income tax to simplify and bring fairness to the system, increase income, and create jobs.

A progressive income tax system is what most countries have adopted for taxation purposes. It appears as if this is the most suitable method as rates increase more to those who can afford to pay them. As taxes continue to increase, more and more people start talking about viable options that would benefit bottom line taxpayers. An option that has been proposed by some is the idea of having a flat rate that in theory would eliminate the concept of inequality by taxing everyone and everything at the same rate.

The United States economy, as known by all, is not in its best shape. One way in which the government gains money is by imposing taxes on people. There are many taxes that are placed on different things that everyone needs or already has. The United States uses a taxation system which is criticized by many. The system used in Progressive Tax; however, many people believe the system of Flat Tax, or Proportional Tax, should be the system that is used for taxing.

There are also some ways the flat tax system does not benefit taxpayers. It penalizes the low-income population because we all rich and poor have to spend money on the same things, such as food, housing and clothing. People with lower income would have less to spend on these things with a flat tax. A flat tax would benefit only the rich, because they would have more money left. It eliminates a back-up revenue source for the government, because the government relies heavily on revenue generated from income taxes.

The modern concept of a flat tax was popularized by Stephen Forbes in his 1996 presidential campaign when he proposed a universal income tax rate of 17 percent. Republicans have been advocating for a flat tax plan ever since and the latest crop of presidential hopefuls eclipsed by Donald Trump, proposed similar plans. Ted Cruz was talking about a flat 10 percent while Bush, Huckabee, Carson, Rubio and Rand Paul all had similar ideas. The 2016 Republican nominee, Donald Trump, also advocates for a reduction in tax brackets closely resembling a flat tax rate, since he is a reported billionaire. (Shlaes, 2015)

The flat tax has been the topic of debate for some time. Those for and against it have a strong argument with many valid points. The strongest view in favor of a flat tax is the simplicity of one basic formula applied to everyone regardless of income. Deductions, loopholes and tax shelters are no more. Income is multiplied by a single tax rate and the result is one’s tax liability. No grey areas, no burden of proof or records retention schedules, no flow charts or complicated forms to follow. The current tax code for the United States a complicated network of 3.8 million words making up 11,000 pages (ToughNickel.com, n.d.). A flat tax would be easier to understand, meaning fewer errors, an increase in compliance and a decrease in tax fraud. Less time, money and energy will be spent on monitoring compliance and pursuing amounts owed. “In a typical year, the IRS estimates that for every dollar it collects, another 19 or 20 cents is owed, but not paid (Economist.com, 2005).” Resources could be used elsewhere.

Since the birth of our nation, there has been fierce debate between fiscal conservatives and liberals on how we should tax our people. Conservatives say that we should tax the rich less, where liberals say we should tax the rich more. Raising taxes on the rich is beneficial to the majority of the American populace. Taxing the rich more and the poor less would increase the velocity of money in the economy. The super-rich should pay more to maintain and improve the system they utilized to become rich. We need to retool the new generation of workers for the world and that required more capital. The richest 1% of people in the country own more than the bottom 90% so they should be completely fine with a higher tax rate.

Taxation rate is a very controversial topic in America. Many people like Mark Rosenfelder, Author of Why the Rich Should Pay More Taxes, believe that the more you make the more you should be taxed. They justify this by saying that Upper class, well-to-do individuals take more from the government. They say because wealthy people have more, they have more to lose; thus they require more protection. Many believe that a flat tax, a tax in which all citizens pay equal tax regardless of their income, is unfair. Really? Taxing someone because they work hard and make more money seems to make less sense. Raising the tax rate just because they work hard and have more than other people isn’t right. The wealthy upper-class citizen did not make the lower class poor and shouldn’t be taxed heavily to support them. In his essay Rosenfelder focuses his attention on how to bleed the wealthy for their money through a progressive tax.

Many new tax plans have been presented over the many years of the U.S. Some push to increase the current tax percent for the upper class in hopes to increase the governments funding along with dreaming that the poor and middle class will then have their taxes reduced. What many fail to understand is that increasing taxes alone on the rich will actually cause the lower two classes to carry more of a burden. The reason the upper class has so much wealth is they have tax teams with several tax specialists advising them how to maximise their money used for investing. With such advisement for the upper class one

First and foremost, there are always pros and cons of every issue. The same applies to flat taxes, however, there are more drawbacks to the implementation of a flat tax system than there are benefits. In reality, a flat tax system does not offer income equality amongst taxpayers. If the United States switches to a flat tax system, it would greatly exacerbate longstanding growth in income inequality (Frank 1). A flat tax would increase inequality by substantially reducing rates on wealthy

The first major argument of the flat tax is that it everyone pays the same percentage. This seemingly simple statement has managed to split up into sides. One side of the coin, there is a certain amount of fairness employed. Everyone pays the same exact

A flat tax (short for flat tax rate) is a tax system with a constant marginal rate, usually applied to individual or corporate income. Therefore, the same percentage taxes would be paid regardless of the difference of income. It can be seen that flat tax is simple to operate. But it is not true in reality, a flat tax, applied across the board, would also increase the tax burden on those with lower incomes, many of whom currently pay little or no income tax (Sonic, 2013). If a flat tax is only operated without restriction, the simple tax rate cannot keep social order, it needs more complicated rules. For example, for a large company, if it currently deducts income expense to determine taxable amount, the remaining amount after paying taxes would decrease. There’s no lower limit to maintain normal government revenue.

A Single Flat Rate. All flat tax proposals have a single rate, usually less than 20 percent. The low, flat rate solves the problem of high marginal tax rates by reducing penalties against productive behavior, such as work, risk taking, and entrepreneurship.