In a flat-rate system, all are equal. We would all pay the same percentage taxes, thereby keeping it fair. A person who makes $100,000 a year paying 20% taxes pays $20,000. A person who makes $50,000 a year paying the same 20% tax rate, pays $10,000. It's only fair to have the same percentages across the board. Otherwise the very wealthy pay less and less percent the more they make.
IF you earn more you pay more. If you earn less you pay less. It just makes sense and it is much easier to understand. NO more confusing tax codes-just pay the 20% or whatever and be done how simple is that. Also, the rich would be paying what is fair for their income and the poor would naturally pay less-what is appropriate for them. It is the only fair way to go!
Two people earning $50,000 each will pay together less tax than one person having $100,000 on the progressive tax system, so simply $50000+$50000 is not = to $100000. This generates all kind of problems, including that you have to have a monster like IRS to figure out where each dollar came from.
I have a report for my history on flat taxes and I want to be in favor for flat taxes but the people who don`t like flat tax only talk about the poor and don`t come with a reasonable argument only that the poor will suffer severely but in my opinion they wont suffer as much as the nos think since their tax percent will only raise about 7% or less also most of the lower class (not all of it) somehow seem to get enough money to buy gold watches and hundreds of dollars of clothes and shoes and if they can do that why cant the pay and extra few percent?
Here's a new way to look at it: If we overtax the wealthy business owners, then they lose business. Losing business results in laying off employees, which raises the unemployment rate. Now there are more people without jobs needing government assistance, and then the government will shell out even more money to take care of all of these people, plus all the people that already get assistance. "Hey, now we have even LESS money, so lets place even MORE taxes on the rich, and see what happens!" The cycle continues. And all the while, other people are barely even paying taxes, and in turn, get more than they give. So, people who do nothing get the money that other people actually earned. It's turning into socialism, which is a bridge to communism. DOES THIS MAKE ANY SENSE?!? A flat tax rate will be smarter economically and is fair to everyone.
Are you paying for your college tuition? I didn't think so. See, the reason people with money have to support people without money is because when you have money, you have opportunity. If you let this continue there will be super rich people and dead people. I agree that people are lazy and I don't want to pay a cent for them. The idea is right, the execution is wrong. This goes for both parties. Guns for example, there should be no problem for anyone to own a gun if they want. The problem is that there are tons of idiots out there who can't handle owning a gun. Therefore you have to make laws to keep the guns out of their hands. In reality, no one needs a gun except police and military. If you think you need a gun, you're an idiot. People want to complain about people like Michael Vick killing dogs yet they want humans to suffer and die because they can't afford health insurance or because maybe there is a legit reason they don't have money. To me, that doesn't sound right.
A 10% flat tax for individuals and businesses with no deductibles, no credits, and no excuses
is the way to a healthy economy provided there is a balanced budget. Rand Paul is the
only politician that I know of who talk about implementing a 10% flat tax. Good for him !
Even though progressive taxation helps the Federal Government allocate more revenue the flat rate taxation system is fair, logical, and can be extremely effective if the national politicians can find a way to create a responsible fiscal policy for each FY and intelligently cut spending in some obvious areas i.E. (welfare, medicaid, education, and other forms of social government spending) The notion of a flat tax rate increases the incentive to produce, trade, invest, and allocate resources. This is what helps economies grow. Incentive based business expansion. Thus, creating more jobs, therefore, creating new tax payers in the long run. This is the way capitalism should work, and this would be a long term solution that can have excellent results, if implemented correctly.
As a new student to economics who has been studying for 2 years, The more disposable income a consumer has the more money they have to spend. This usally means that the economy gets stimulated more and the better the economy is going, the more likely it is that imports become cheaper.
I think people think of a flat tax as applicable to all things, but in making the link to responsibilities of citizens to their perspective country, what contribution should be made? A simple division of taxes on a flat tax concept for personal income tax and a progressive tax on businesses would ultimately satisfy the revenue needs of any heavily business regulated government. As the belief that everyone is responsible to help with the basics (i.E security, transportation and development) a low flat rate for personal income tax say at 5% with zero deductions could more than accommodate these needs and perhaps provide an emergency fund for disasters. On the other hand a progressive tax system levied on businesses might help curve corporate behavior. For example, if business were able to claim deductions for employees would they hire more employees? Probably. And wouldn't that be better for the overall system and contribute to the flat tax bracket in personal income tax? There are plenty of other creative deductions and of course there are always business income brackets so that big corporations pay more than small businesses, but I think you can process the idea....
A flat tax punished the poor because the percentage of tax represents much more of their usable income. For example, if you make $100 and there is a flat tax of 30%, that leaves you with only $70 for living expenses. If you make $1000, the flat tax leaves you $700 for living expenses. Obviously, the person that makes more is not as affected by the tax because they have so much left after taxes. This makes the poor poorer and the rich richer. Taxes should be progressive, charging more to the richer and less to the poorer.
A flat tax is much worse than a progressive tax. For example, imagine a flat 50% tax rate. Someone making $30,000 is left with only $15,000, and is made desperately poor by the tax system. Someone making $10,000,000 is left with $5,000,000, and is still a millionaire. The effect of losing a certain percentage of your money is practically greater for those with less money. Therefore, it is appropriate to tax them less.
It has been said repeatedly that a flat tax would be more fair because then the rich and the poor would "share the same burden." This would be hilariously laughable if it weren't such a disgusting embodiment of the greedy, "every man for himself" mentality. I will never be able to take anyone seriously who can look me in the eye and say with a straight face that a single mother working three minimum wage jobs, struggling to make ends meet and a millionaire could ever feel the same financial burden under any tax system, least of all one based on a flat rate.
Flat tax systems aren't reasonable because they assume that everyone has the same ability to pay a certain tax rate. Those with lower income obviously can't afford to pay as much as those with a higher one. Flat tax systems are either unsustainable because they would ask for a less amount than what the country needs, or would be unfair to those who make less because the amount demanded would not support their lifestyle.
Flat rate is the most fair plan. But, it does not fill up the budget in the USA. If the flat tax is 30% that still does not fill up the budget. You would need the flat rate in the upper 30% which hurts the poor and the middle class. But, the progressive system, not fair, does work better. Poor pay less and rich pay more because having the tax rate more does not hurt the rich that much. And the progressive fills up the budget to where everyone is not hurt the same as the flat rate.
I've been poor on and off as I divorced and lost three jobs since Obama took office. I have two kids and we are all white and I have my AAS degree in Accounting. Having been on the system on and off the past three years I can say that what you are able to be on is all income related. Things may be low cost or even free but it is still not enough to pull a poor person out of poor. It just assists in maintaining their poor status. I made sure not to buy chips and a bunch of junk food as I was embarrassed enough being on food support and people have opinions when you watch what EBT people buy. My point is, I'm okay with a flat tax if someone is in the middle to upper middle class where they are maybe living within their means with comfort and not having to live to the penny paycheck to paycheck like folks such as myself who have made $30,000-40,000 with child support and working not only a FT time but a PT job as well as attending college. Establish a flat tax for single folks at $30,000, single with up to 2 kids at $45,000, married couple without children at $35,000, married couples with up to two kids at $50,000. Maybe something like that where they compromise on using flat tax and progressive tax. Progressive tax helps the poor, low income and lower middle class and the flat tax benefits the wealthy. Why should the wealthy be punished for their success? They earned it so why take a lot from them to support the rest of us who are struggling? It's a nice thing but shouldn't be a requirement. Establish thresholds. I think our society is over populated as it is and some of the parents now days is a disgrace to raising productive adults. I say limit the threshold to two or maybe three kids per family. Just because you have more kids doesn't mean the threshold for going from progressive to flat changes because you have more kids for your, what could be called unfortunate circumstance, shouldn't hold everybody else accountable to support you. I have been support through the system but I control getting pregnant to control my situation and I have a degree and I am looking for work to get off the system as soon as possible, as everybody else should use the system as temporary help.
A progressive tax ensures the rich pay their fair share. For example, sales tax is an example of a flat tax. If someone who makes 15K a year goes out and buys a $500 TV, with a 7% sales tax will pay $35 in taxes for that sale. $35 is 0.2% of his or her income. However say someone who makes 150K a year buys the same TV, they pay $35 in taxes as well, but $35 of 150K is 0.02% of his or her income. That goes for anything they buy that is taxes, so school supplies, clothing, etc.
So, even though flat tax seems fair, it really is not, the rich would pay a much smaller percentage in taxes compared to the average working class citizen. Completely unfair.
Only the weathy will benefit from a flat tax. I'm retired, have a mortgage, make about $50,000/yr and pay an effective rate of about 11% after deductions or about $3,600 based on the 2011 tax tables for a single individual. If I were taxed say 20% on my adjusted gross income and had no exemptions or deductions, I would pay about 10,000. I would likely lose my house, my car and go homeless. IS THAT FAIR Mr. Norguist? I'm sure you would be thrilled to pay just 20% on all your income, adjusted or not.
The current tax code already shifts the burden too high on the rich. I won't win any elections stating this, but it is a fact. The progressive tax code should be altered where the bottom 47% share some burden of the income tax (currently they don't) however the bulk of the burden would still be on the upper middle class and the rich.
Flax taxation arguments - "Just do it" "It's easier" "Why can't the poor just pay?"
Progressive taxation arguments - solid, real life examples!
It all comes down to disposable income.
And remember, how high you begin on the ladder determines how far you can climb...I guess fall too, but it's a lot better to fall from $100k to $50k than from $50k to $25k (if you can't relate to such "small" figures, please open your mind and your heart)