Flat Tax

[True Federalist (진정한 연방 주의자)]

Could a flat tax be more palatable with a generous exemption or like what has been suggested more, a tax credit/deduction to make it more progressive. That said, while it may sound painful, isn't the premise of a flat tax to encourage all taxpayers to be sensitive to government spending as well as reducing the influence of special interests who seek carve outs in the tax code? To be honest, I don't think it's so bad in theory to make sure everyone has a stake in something (such as having everyone pay for the safety net or etc). I understand the practical realities can be more painful though.

The idea that people generally make rational economic decisions is one of the most irrational ones economists have ever toyed with.  For one thing, it assumes there are such things as objectively best economic policies.  But more importantly, there's little evidence that the idea reflects how people actually make decisions.  So the idea that a flat tax would be good because it efficiently conveys the cost of government to voters and thus can make rational decisions on government spending strikes me as completely ludicrous.

[Sir Mohamed]

Not as income tax. VAT or cigarettes should be taxed with one rate, but not incomes. The CEO should pay a higher share than his secretary.

[MR DARK BRANDON]

Think of wealth as a water pipe it will drain down from were ever we start. Now wealthy People Are The holders of our Economy. now, if we raise taxes for wealthy People, then the drain will start at the middle class, thus only benifiting the poor, and causing the holders of our economy to lose money. however with a flat tax, wealthy People will earn more money thus allowing the Drain to start at the Top, and allowing more money to drain down, thus benefiting everyone.

[Koharu]

Can we include corporations in the flat tax? Capital gains? Income from shares and investments? If we did that, closed every loophole, had a per-person and per child deduction at some actually sane poverty rate percentage that was tied to inflation, maybe, maybe, maybe I'd be in favor. But honestly without seeing a workout of the numbers, I'm pretty sure I have to say no.

All I can say is that we do need to raise taxes significantly on the wealthy (my own family unit included, though for all intents and purposes, we're just regular middle class) and close loopholes and actually bring in some revenue before the next recession hits. I'm also a fan of cutting back on our defense spending because it's ridiculous, but I know that alone isn't enough. I'm a big fan of lots of brackets that are very gently graduated with no loopholes.

[muon2]

Can we include corporations in the flat tax? Capital gains? Income from shares and investments? If we did that, closed every loophole, had a per-person and per child deduction at some actually sane poverty rate percentage that was tied to inflation, maybe, maybe, maybe I'd be in favor. But honestly without seeing a workout of the numbers, I'm pretty sure I have to say no.

IL does all that, and even gets high marks for the ability of its flat income tax to weather a recession (it's the only part of finances that can, the rest is pretty bad). Yet the Dems are campaigning on a constitutional amendment to shift to a graduated tax using brackets like CA or MN, but without the itemized deductions targeted for the middle class.

[Person Man]

crackpot idea

[courts]

One of the most evil ideas in economic policy.

The flat tax existed long before the idea of variable tax brackets. In many areas of tax policy it still has a role. One might call it it anachronistic for modern income taxation, but a blanket tag of evil seems over the top.

any in particular you advocate?

[muon2]

One of the most evil ideas in economic policy.

The flat tax existed long before the idea of variable tax brackets. In many areas of tax policy it still has a role. One might call it it anachronistic for modern income taxation, but a blanket tag of evil seems over the top.

any in particular you advocate?

I was thinking of both property and consumption taxes as two that have broad impact and work as flat taxes, perhaps with credits to offset basic living expenses such as a homeowners exemption or discounts for food.

[Senator-elect Spark]

No, a flat tax disproportionately affects the poor. All income brackets are taxed the same in a flat tax. I prefer a more progressive tax.

[parochial boy]

Sure, but on the condition that everyone also has the same income

[Skill and Chance]

A flat tax with no deductions at all, including charitable and mortgage interest deduction, but with a universal standard rebate (effectively a UBI) to effectively untax the first 50k or so would be preferable to what we have now, but a consumption tax with a 0% income/ corporate/ payroll/ inheritance tax would be vastly better.

Strongly agree with this on principle, but it needs to be paired with a hefty UBI.   With that, it's effectively a one-wealth tax that would be better at taxing the ultra wealthy than the current system.  In practice, the VAT/federal sales tax rate would probably need to be ~35% to balance the current budget plus fund the UBI by itself.  That does give me pause.

[Sam Smith]

A Flat Tax would be better than the current system.
But it has to be very low. Not more than 15%.
But we have to cut spending to get to a Flat Tax.

[brucejoel99]

No.

It's one of those things that might sound fair at first but, upon further examination, either doesn't provide the government revenue we need (when the flat tax is too low) or totally screws over the poor & middle class (when it's too high).

Flat taxes are unfair to the poor & middle class because, even though they're contributing the same percentage of their income, that percentage becomes punitive more quickly. It's easy to give up a quarter of your income if you make $200,000 a year. It's less easy if you make $30,000.

For example, let's say you have 3 people. Person A makes $100 a week & Person X makes $10,000 a week. We tax these people at 25%. At the end of the week, Person A only has $75 for all of their expenses, while Person X has $7,500, & you can certainly do a lot more with $7,500 than you can with $75.

At least with a progressive tax system, we identify income & then tax flatly based on that. It's tiered, & every person is taxed the exact same within a tier. Your first $10,000 is all taxed at X%, then the income you generate from $10,001 to $50,000 is Y%, & so on & so forth.

[cris01us]

A flat tax with no deductions at all, including charitable and mortgage interest deduction, but with a universal standard rebate (effectively a UBI) to effectively untax the first 50k or so would be preferable to what we have now, but a consumption tax with a 0% income/ corporate/ payroll/ inheritance tax would be vastly better.

You've been reading Friedman, hahahaha! I love it.