Federal Income Tax Vs. Flat Tax

Flat tax and progressive tax either can be considered fair or well put together for the American people since it has a rational approach towards taxation. However they do vary from each other when it comes to its treatment of the wealthy people, and each of this system is biased and discriminatory, but at least one good aspect of progressive tax is that people of lower income are still paying low and under flat tax they will end up paying same as a wealthy individual who is well. Only because the name of a policy sounds progressive does not mean its action has to be. Furthermore, the current progressive tax policy is only a few steps away from becoming the flat tax and there is no difference among these two. So if the flat tax is being implemented in the United States it will have validity to do more harm to the majority of the Americans then giving them any

One popular method of tax reform that some of the experts in this field think is worth considering is implementing a flat tax also known as a consumption tax. J. D. Foster says that “any tax with a single tax rate could be considered a flat tax.” An article from the website Tax Policy Center defines consumption as being “income less savings” (Gale). The major difference between an income tax and a consumption tax is the way savings are taxed. With an income tax all income is taxed when it is earned and again when interest is earned on any savings. Critics of an income tax say that this is double taxation and

America currently has a progressive tax system. This system is identified by the fact that there are percentage brackets which are determined by one’s income, as the income increases so does the percentage of the income being taken out. The progressive tax can be illustrated by a curved line going upwards on a graph plotting income bracket on the x axis and amount of money being taken out on the y axis. The flat tax is the proposed tax which is signified by having one single percentage throughout all income brackets this would look like a straight line on the graph explained above.

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

Within the United States, there is an unequal collection and distribution of resources. The current unequal or socially unjust tax system is a direct contrast to the social justice theories of John Rawls. The taxation discrepancy has ramifications on many important aspects of our society, such as health care, employment, old age security, and education. These issues affect everyone in our society, regardless of age, race, gender, or sexual orientation. Thorough more equal taxation, we have the potential to create a more society as a whole.

A flat tax system in the United States by definition refers to taxing household incomes at the same rate regardless of income levels. Advocates of a flat tax system argue that it will simplify U.S. tax codes and eliminate other taxes. Opponents of a flat tax system argue that it only benefits wealthy individuals and would eliminate the IRS causing wide-spread unemployment. Here are some of the pros and cons of a flat tax system.

The IRS argues against the flat income tax since it is regressive with all taxpayers paying the same tax rate. While it is true that the current federal income tax system is progressive, the primary argument for a flat or flatter tax is to simplify the tax system. A flat or flatter federal income tax system with a limited number of exclusions and deductions could accomplish the same goals in a much more expedient way.

Our current income tax system today is very complex, unfair, inhibits saving, investment and job creation, imposes a heavy burden on families, and weakens the integrity of the democratic process. It can't be fixed and must be replaced. The U.S. income tax code is a long and complex system. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms. The IRS sends out eight billion pages of forms and instructions each year. The administrative costs of the tax system far exceed those borne directly by the IRS. Each year Americans devote 5.4 billion hours complying with the tax code, which is more time than it takes to build every car, truck, and van produced in the U.S.

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.

With the flat tax, everyone would be taxed at one rate. "Under the flat tax, the current Internal Revenue Code's 480 forms would be replaced by two simple postcard-size forms. Individual taxpayers would receive a generous allowance based on family size (more than $33,000 for a family of four) but would be responsible for paying a tax of 17 percent on any wage, salary, and pension income above that amount." (Mitchell) Under this system, there would no longer be an inheritance tax or a capital gains tax.

First, to understand the effects of a flat tax and how it compares with our current system, it is important to know what it is. “A flat tax is a tax system, which refers to a tax on household income, taxes at a uniform rate, regardless of income level” (Meehan, 2016). This means that every individual in the nation would pay the same rate regardless of what they earn. A progressive tax, on the other hand, is based on an individual’s income and when their income increases, so do their taxes (The Economic Times, 2016). Under this system, the rich pay more and the low-income earners pay less. At present, this has caused some very big issues including a widening gap in our social ladder and an uproar over where the majority of the country’s wealth resides. These problems are the reason that government officials are seeking out new options. However, the flat tax alternative is less progressive and for many reasons.

The supporters of the Flat Tax system are quick to point out this system's attributes but not as quickly as the criticisms by those who oppose it. The filing of taxes each year would be much easier because there would be one set rate to pay. This type of system also discourages, and makes it almost impossible, to find and use any existing schemes that are present to avoid paying taxes. However, because there is a set rate at which everyone needs to pay, this system is quite unfair. Those who earn and have a lot of money should not pay the same amount as someone who has only a fraction of their wealth. The wealthier you are, the more you should pay because you can afford it. If there is a set tax rate it would be too high to some people and pocket change to others. A system like this also takes away many, if not all tax deductions. An event like this would cause irreparable injury to the middle class, who often times rely heavily on money they will get back from tax deductions.

The national debt is growing and the government is unable to keep up under the current Progressive tax system, in the United States. A solution for the United States debt is to switch to a flat tax system. A switch to a flat tax system would simplify the tax process, it would make taxes fair and even, and it would allow the government to reduce the United States national debt. A flat tax system is a system that taxes every individual at the same percentage. It is not like any system the United States has seen before.

We have all heard the famous quote by Benjamin Franklin who stated, “In this world nothing can be said to be certain, except death and taxes.” (“Benjamin Franklin Quotes”) We find this to be true as we begin working and feel the pain of money being taken from our paychecks. Then we face the chore of having to file income taxes yearly. Although there are many taxes we are subject to, most people are referring to federal income tax when they complain about taxes. There has been debate for decades about the current system but there has been no agreement on how to fix it. The United States currently has a progressive tax code which means people pay taxes according to their earnings. This has been in place since the time of Abraham Lincoln. An alternative

Policy makers have introduced a solution to the staggering proportion of taxes that Americans spend. The flat tax, based on an idea developed by Professors Robert Hall and Alvin Rabushka of Stanford University to create a fair, simple, and pro-growth tax system (Mitchell 1, 11). There are four basic criteria that make up a flat tax. First is a single low rate on taxable income, the baseline for taxable income would be raised to a certain amount dictated by a personal exemption. Second is simplicity, all Americans would fill out the same postcard-sized form to pay their taxes. Third is the reduction or elimination of deductions, credits, and exemptions, depending