Flat Tax Essay

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

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

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.

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.

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.

With having the above statements showing the cons of each system, it is fair to say that having a flat tax would be good for our system. It would make everything equal for every class, and not have any or as much negative comments directed towards it. Changing from our “burden” system to flat tax would be a win win for

"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.

Throughout history, taxation on United States citizens has proven to be a necessary component of a growing economy as means of generating revenue for the federal budget. The federal budget funds the many government programs implemented to keep the disabled, elderly, and unemployed from falling bellow the poverty level. Unfortunately, this fund is not always available when catastrophic evens, such as an economic recession, deplete the revenue coming in and create a budget deficit. In order to regenerate money coming in and replace the deficit, the government calls on money gained from taxes. What happens when tax money is already appropriated to other programs? A tax reform. A tax increase has many times been the

In answer to the confusing tax codes, Dr. Carson proposes a flat tax rate across the board where everyone pays 10 to 15%

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 Fair Tax® is a proposed tax reform to the current taxation process of the federal government in the United States. Written by John Linder and first introduced to Congress in 1999, the Fair Tax® is a proposition for the federal government to get rid of all current taxes (including federal income taxes, estate taxes, payroll taxes, etc.) and tax only the purchasing of goods and services for personal consumption. Instead of taxes being applied to income, each individual would receive their full paycheck with no federal taxes deducted and instead a 23% sales tax ($0.23 for every $1.00) would be included in the price of an item. This translates to about a 30% sales tax ($0.23 on top of every $0.77) today, because instead of the item being $1.00 it would be sold for $0.77 with a $0.23 tax on top, whereas the price under the Fair Tax® would be $1.00 with the tax included in the price. This percentage would be adjusted each year based on the government’s revenue in the previous fiscal year. To make up for the large tax on sales, each citizen would receive a “prebate” or annual consumption allowance check that should negate the sales tax on purchases that are essential for living. The prebate would be given to each individual based on the poverty-level. (1) There are several points made opposing the Fair Tax®, but in this paper I will mainly be discussing the supporting points and how it would benefit our country’s citizens, businesses, economy, and government.

There is evidence of positive outcomes from those who have adopted the flat tax system such as economic growth, unemployment drops, and an improvement in tax compliance (“A Flat Tax Should Replace the Current System”). There are currently 41 countries and 8 states currently imposing a flat tax on income. When Pat McCrory became Governor of North Carolina in 2013, their taxes were the highest in the Southeast at the time, but he was determined to reform the tax system and increase job growth. He got with legislators to overhaul the tax system for the first time in eight decades. Two years later, North Carolina will pay off its 2.5 billion debts and the unemployment rate has dropped. These factors certainly make North Carolina a good choice for new industry, or companies or families looking to relocate. The other 7 states that join North Carolina in a flat tax system are Colorado, Illinois, Indiana, Massachusetts, Michigan, Utah, and Pennsylvania. The rates run from 3.07% for Pennsylvania to 5.8 % for North Carolina. Republican Presidential Candidate Dr. Ben Carson is in favor of a flat tax system for the United States. He suggests 10-15% but believes this rate could go down over time as the national debt gets under

Should the flat tax rate system be implemented? No, the flat tax rate system should not be implemented. In this paper, the pro arguments will be presented, which will affirm the thesis. Then the con arguments will be presented. A rebuttal will then follow, and finally, the author’s conclusion will be offered.

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