Essay on Flat Tax

In this section of the paper flat tax will be compared with our current tax system in order to distinguish if differences it will make in the United States after its implementation. Along with that, the similarities between a flat tax and progressive tax will be noted too. As it is understandable that the ultimately targeted population for the flat tax is the upper class however when it comes to flat tax vs. progressive tax in the United States progressive tax system has been more welcoming than another method. However, as stated by Piketty and Saez (2007), in the United States the federal tax system has undergone three historical extreme changes which have pushed the federal tax system towards a less progressive side. Such in progressive tax system has provided the leverage of lower tax rates which benefits the one percent of Americans but not the majority of the American population. So although it is well circulated that the progressive tax methods have specific tax rates that ensure the higher

The current tax policy in the United States is very confusing and it is very costly for our government to administer it. It is in the best interest of our country and its citizens to revise or replace our current tax policy.

Taxes are unavoidable because government is needed and government operates on tax revenues. The FairTax is a tax-inclusive progressive national retail sales tax that replaces every other federal tax in America. The new national sales tax would be 23%. Although there have been some questions as to whether the sales tax rate is 23% or 30% and they stem from the meaning of tax-inclusive and tax exclusive. The sales tax in Florida is an example of an exclusive tax because it works of a preset base. If a person buys something for 1$ and pays a .30$ tax on it the sales tax is 30 percent because it is .30$ on the dollar. With the inclusive tax the item would cost 1.30 because the tax is included with the cost. The tax rate of 23% is calculated by

Throughout the entire existence of any form of government, there has always been taxes. Most of the time (if not all), people hate taxes. With this being said, the United States has adopted a progressive tax since its very existence. We believe that if our nation is placed under a flat tax system, our economy will operate more effectively. If we incorporate a flat tax system we will be able to ensure fairness among all citizens, eliminate tax loopholes, and allow opportunities for business expansion. With this being said, we will be examining the strengths and weaknesses about the flat tax system and how it has been used into practice.

In the United States, the top one percent received about 20 percent of the overall income for 2016. This creates an uneven distribution of income causing Americans to argue about whether or not the wealthy should pay more in federal income taxes. One side of the argument is that the wealthy make a huge portion of the nation’s income; therefore, they should have higher tax rates. The other side argues that wealthy Americans already pay their fair share of taxes by paying nearly 40 percent and should not be forced to pay more. These arguments both use compelling evidence to make their claims; however, a solution could be reached by increasing the tax rate of the top one percent by only 10 to 20 percent.

People do not enjoy talking about taxes because they are too political, confusing, and depressing. It is no secret that the American tax code is a mess and something many economists describe as too broken to fix. Despite this, politicians have never stopped from trying to “fix” the code, yet they have had very little success. The U.S. Government’s tax code currently comprises “more than 67,000 pages of complexities” (Boortz, Linder, & Woodall 14). The Americans for Fair Taxation (AFFT) was founded in 1995 with one goal: create the simplest and best tax reform plan that would work in the modern market and economy. The AFFT’s best solution was a bill which they promptly called the FairTax.

The current tax code for the United States is almost 74,000 pages long. Or to put that into a different light: About 116 copies of Herman Melville’s Moby Dick. It is small wonder that a few of the announced candidates for President of the United States, have again begun to kick the tires on the topic of a Flat Tax. But is a flat tax actually a solution to our country’s growing tax complexity? What are the potential economic effects of a flat tax (both positive and negative)? Finally, is a flat tax even a viable solution? In short, will it work? As a concept, a flat tax is spectacular. Simplicity at its finest. As a fiscal policy, I believe that same simplicity must be examined and inspected closely.

(Black, 565-483) This means that every working family still pays taxes, however their taxes would be cut, meaning they would be paying less taxes than before. As for the “ millionaires” and higher class of society they will still pay the same taxes as they did before. This policy is more likely to be considered as equal because it is not rated fair when people from different social classes with a big difference in their incomes pay the same taxes. Especially because the taxes will eventually be lowered for the lower classes because they would be unable to afford paying the regular and high taxes. This will also lead in the cut of taxes for the high social class, which then makes the whole concept unequal. Not just for the people but also for the national economy (Witcover, 791-545).

The tax policy in the United States is very confusing. When the tax policy was originally written in 1913 it was four hundred pages. Now, over the past ninety one years, that tax policy has evolved to over 72,000 pages. Since the tax code has become so lengthy and nearly impossible to understand, the topic of tax reform has been in the minds of many. Although, most barely think about tax reform until tax season. It is a controversial subject due to the impact a change in tax code would have on the American people. The two most popular and widely known stakeholders in this debate are the two major political parties in the United States, the Democrats and the Republicans. The two parties share absolutely no common ground on the subject of

The governments in any country use various taxation systems to raise funds to fund its national projects. The most common tax system is the income tax whereby the government raises funds from individual’s earnings. However, in the past few years, there has been heated debate about the adverse effects of progressive income tax on productivity and a proposal to replace it with national sales tax (Hodge, 2017). The national sales tax also known as the fair tax is intended to replace the current income tax and the idea is to enable the government to generate income from consumptions as opposed to earnings. This document examines the positives and negatives of the proposed national sales tax on the U.S. economy. The suggestion to impose a tax on consumption rather than consumption aims at encouraging savings and investments to improve productivity and promote economic growth. It is expected to promote fairness in the taxation because individuals will pay according to what they consume and not what they earn.

The Armey-Shelby flat tax proposal will scraps the entire income tax code and replaces it with a flat-rate income tax that treats all Americans the same. This plan would simplify the tax code, promote economic opportunity, and restore fairness and integrity to the tax system. The flat rate would be phased-in over a three-year period, with a 19 percent rate for the first two years and a 17 percent rate for subsequent years.

"A revolutionary change in our tax system is fundamental to re-energizing the American economy and restoring the American dream" (Moore 1). Currently, there are two major plans being considered to try and fix the tax system in the United States. These two plans are the Flat Tax and the National Retail Sales Tax. "Both the Flat Tax and a National Sales Tax would replace today's discriminatory tax structure with a single low rate. Either plan would promote the kind of capital formation that America needs to boost workers' incomes and raise long-term economic growth" (Mitchell 1). This means that the flat tax would take away the savings from the government and pass them on to the citizens and businesses. By doing this, there would be a rise in long-term economic growth.

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 loudest clamor against the flat tax would come from homeowners, Realtors, and builders, who would be hammered as the flat tax does away with deductions for mortgage interest payments and local property taxes. If not negotiated with skill, this issue could be the flat tax movement’s Achilles’ heel. An analysis by the economic consulting firm DRI/McGraw-Hill estimates that

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