Flat tax vs. current tax system? HELP on a paper!?

Question

I know this will sound horrible, but, what is the different? Flat tax is one flat amount charged to everyone no matter what income?? Is that correct? And the current tax system depends on our income?

I'm supposed to do a paper for economics.

What should I cover in this paper? I need help.

Answer 1

A flat tax would tax everyone at the same rate (percentage). There would be no exemptions or exceptions. There would be no loop holes for the very rich to use. A flat tax would almost eliminate the need for an IRS. That alone is a good reason to implement a flat tax. The other tax that has been discussed with the "USE TAX". That would tax everything we buy but not everything we earn.

Answer 2

A flat tax is unfair because it is the same rate for everyone. The last time ocngress talked about a flat tax they were talking 23%. 23% of $25,000 hurts a lot more than paying 23% of $500,000.
Also if you look at the current system the average taxpayer is paying an effective rate of less than 20%. This would not do away with the payroll taxes which at this point is 7.65% of the first $94,600 of wages and 1.45% of wages above that amount.
In effect a flat tax would rasie taxes on the poor and most, if not all of the middle class and lower taxes on the richest taxpayers.
If you want to see the effects of a flat tax look at Pennsylvania. They have a flat tax and because of it every local government has had to raise taxes and impose new taxes to make up for the services that the state can't afford to pay for.

Answer 3

Flat Tax is supposedly fair because everyone pays the same rate. (i.e. 15%) It is considered a regressive tax because the poor pay a higher percentage of their earned income when they pay the same percentage. Present system is considered progressive because the rich do pay a higher %. A sales tax is considered regressive because we all pay 5% for example. So a poor person pays the same 5% for food as a rich person. The economist Paul Samuelson wrote quite a bit about this subject. Easy to read. Look him up on-line.