Pros And Cons Of Flat Tax

Promote Economic Growth- Many advocates of flat taxes argue it will promote economic growth and spur job creation. One argument is that many working Americans would work harder to increase their incomes without fear of entering higher tax brackets.

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.

There are three different types of tax systems presented in this article: Progressive income tax, Flat tax, and the Fair Tax. The progressive tax system is what we have in the US and is common in countries across the world. It bases the percentage of income tax you should pay by the amount of income you receive. Basically, if you have a large income then the rate of tax you will pay is larger and, furthermore, if you have a low income you will have a lower rate to pay. Many conservatives dislike this system because it forces the top percentage of taxpayers to pay a majority of the tax revenue. “According to the Tax Foundation, the top 1% of taxpayers have consistently paid more in federal income taxes than the bottom 90% since 2003…” It treats people differently and it allows for

One simply put that the higher the minimum wage, the more people are going to want to work. The more people working the more money that the government can tax and circulate into the economy. The more money circulating, the better the economy. Another point being that the more money spent on goods also boost the economy, and having more money to spend would be a direct result of raises in

Minimum wage has many advantages from a microeconomic and macroeconomic standpoint. A key advantage is the idea that minimum wage allows workers to earn enough money to live on. Thus, it ultimately leads to a reduction in poverty. Another key advantage is that minimum wage can actually create jobs and grow the economy. This would happen by having more money flow through the economy, because then household spending will increase (ProCon.Org). Minimum wage also allows workers to support their families. Without a minimum wage, many families will not make as much money, therefore, it will be very difficult for the workers to support their families. Minimum wage also ultimately reduces taxes, because instead of indiviuals being unemployed and on public assistance, the person is working. This relieves the load of taxes on the state by not having people on different public assistances, such as food stamps and welfare (ProCon.Org). Another pro of minimum wage is that it is another incentive for high school workers to get in the door early of unemployment and gain experience. This can help them in get a job in the future(Root). The issue of minimum wage has an abundance of pros.

There have been many arguments over the years stating that raising the minimum wage will greatly impact the US economy. Some of the arguments have been that this will stimulate the economy, a competitive wage for all, and capitalistic competition. Although raising the minimum wage might sound like more money in your pocket, it would not only increase the poverty rate but also would cause those in poverty to rely on the government for more assistance as the prices of goods and services would rise well above what they are now.

Throughout history, the lower class of society has always gotten “the short end of the stick” and been taken advantage of by the upper and more wealthy class. Hard working citizens that work long hours, yet receive low pay. Sometimes the person might have to work two jobs to provide for their family and put food on the table. The movement for lower class to strike back is happening and is growing every day. The movement for a raise in minimum wage is on the rise and the people are supporting it. Raising the minimum wage helps with the many problems associated with minimum wage jobs. Minimum wage presents many problems for the average lower class citizen including shelter, health insurance, and food.

Does an increase in the minimum actually help reduce the poverty level in the United States or does it just reduce the number

If it was not for minimum wage then many unskilled workers would not be able to get a job due to the fact that business owners would only hire very skilled workers to complete a job because they're paying more money, so they would expected a perfect or “better” job being done. If the unskilled workers have a job then they will be able to pay bills, buy a house, car, and food. With the unskilled workers being able to work poverty will be reduced and many people will not

This is in direct conflict with the purpose of the FLSA and Roosevelt’s attempts at rejuvenating American economy. However, in a study conducted by David Card and Alan Krueger in 1994, comparing employment rates in neighboring states where one state had increased its minimum wage above the federally mandated rate, and the other state had not, found that the employment rate was not directly impacted. (Krueger) This study has been replicated many times over the years, in various locations around the country, and definitive proof has yet to be found that raising the minimum wage will cause an increase in unemployment. On the contrary, stimulating the economy in the form of higher wages is more likely to help increase employment as the demand for goods and services increases. Furthermore, in 2008, Sara Lemos conducted a review on the effects of minimum wage increases and the prices of goods offered. Her findings were clear "Despite the different methodologies, data periods and data sources, most studies reviewed above found that a 10 percent U.S. minimum wage increase raises food prices by no more than 4 percent and overall prices by no more than 0.4 percent.”

People might think that minimum wage has no downside, but surprisingly it has, if someone has worked in a place for years and his wage increased but if the minimum wage increased the new-hires will have a wage that is very close to the person who spent all his years working for this place, “Wal-Mart 's $9 minimum wage has been in place for a little while now, and not everybody is happy about it. Employees who have been there for years are complaining it 's unfair that they now make not much more than someone who 's just been hired off the street, reports Bloomberg News. While some low-level managers have also gotten higher starting wages, raises are small and infrequent for those at the bottom rung -- typically between 3 and 5 percent per year, which comes out to a few dimes annually if you started at $7.25 -- so the jump to $9 wiped out years of accumulated comparative gains for some rank-and-file employees.”(DePillis, Lydia) Another downside to minimum wage is that when the minimum wage rises the unskilled workers would have less opportunities to work since the employers won’t pay that much for the unskilled and will

Although increasing the minimum wage might affect the company’s finances in terms of increased wage bill, it only happens in for a short while before the company adjusts (Cards). Companies have a way of absorbing new expenses without reducing their profits and the expenses incurred due to an increased minimum wage would quickly be recovered in other ways. Therefore, the argument that increasing the minimum wage will affect companies financially is not objective and seeks to deny low income earners fair

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

Imagine standing over a scorching grill for hours, taking care of the elderly, both lifting and transporting heavy loads, basically doing back breaking work; only to be making less than $8 and hour. That is the reality for millions of people in the work force who are earning minimum wage. Whether or not minimum wage should be raised has been a question many people have been discussing for years and has become quite controversial. Those opposed to increased minimum wages would argue that a minimum wage salary is already sufficient enough, or in some cases even “too high”. In spite of the opposing sides, it is almost certain that a rise in minimum wage will either positively or negatively affect several aspects of the country. For one, an increase in minimum wage could result in an economic shift. Furthermore, the current poverty level within the country, with the help of a higher minimum wage, would either decrease or as a result. Thirdly, a change in poverty levels caused by a higher minimum wage would ultimately change the amount of government spending and those who receive it. Minimum wage being raised would definitely be impactful not only the people receiving those minimum waged salaries, but also the economy, their families, and even the government funding.

Moving along the list of advantages, increasing the minimum wage will also increase the amount of money workers have, which, in turn, will inspire them to increase their consumption and pump their extra money into the economy. If workers have more money going into their pockets from increased wages, the income effect comes into play, and provides an incentive to go out into the market and buy goods and services. In an article printed by The New York Times, it was also pointed out that raising the minimum wage would decrease labor turnover. This is because if workers are paid more, they have less incentive to leave their current job and seek a higher paying job.