A flat tax for individual and joint filings, if structured correctly, will generate more tax revenues than the revenues currently received thru existing tax methods. By eliminating certain credits, it would be impossible for a tax payer to receive a refund greater than taxes with held. Other deductions and exclusions currently decrease adjusted gross incomes to lower taxes paid. Some taxpayers are penalized by the alternative tax method, which eliminates their deductions.
The current tax method is complicated and allows for other federally approved deductions, further reducing the gross income and taxes paid. Adjusted gross income is the basis for the tax bracket method currently being used to assess taxes payable or refundable.
The economy has been weakened during the past few years and the current tax assessment method does not generate enough income in tax receipts to support the government. A flat tax, with a flat percentage with held, would be evenly paid by all tax payers. The tax revenues generated would not only support the goverments current needs, but also assist in reducing the enormous federal deficit.
This is true. I too see that a flat tax has the potential to bring in more tax revenue than the current progressive tax method.
ReplyDeleteHowever, one important aspect to remember when taxing the American public, or any public citizenship for that matter, is the cost of living.
Lets assume every working American was paid a fair living wage (a wage adjusted to factor in the C.O.L. in any particular area) so that a family of 4 could be easily support themselves on one income per household. Then your flat tax method would prove to be a better system simply because each family is contributing more to the tax system in general. Higher wage, higher taxes, yet fair to all Americans making $50,000 or $250,000.
Unfortunately the paid wages for a lot of jobs in our country do not make up for the steady increase in our cost of living. 5% of someone making only $23,000 has a stronger negative effect on their standard of living in comparison to someone making $200,000 ($10,000).
If we created a flat tax in this nation, this would put a lot of IRS agents, CPAs, tax attorneys and other related industries out of work. Do you have any idea what that would do to unemployment? There is a verifiable multi-billion dollar industry working behind the scenes of the current tax system.
ReplyDeleteSo yes a flat tax is a nice dream-like escape from the current nightmare that we are in, but do you really think that such a dream could ever become part of reality?