A constant income in the goverment supports growth. Also you know what you pay and it is automatically taken out of your check. Do you think this would help all in the end?
2007-04-13 14:09:08 · 4 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
A flat tax is a regressive tax. In order for a flat tax to generate the income that the current system has would be to charge a flat tax of at least 20% - which is a higher marginal rate than most taxpayers pay now and significantly less than what the highest earners pay currently.
Some argue that they would want the first $X amount of income to be non-taxable. Most people who are talking about this are in the $40-$50 K range. If you do that then the marginal rate on income would have to be even higher than 20-25%.
Others who want a flat tax say that the high income taxpayers don't pay enough and that they have too many tax breaks - this is way off - most of the "tax breaks" that people are thinking of - items on schedule A, child tax credits, tuition deduction/credit etc, are phased out at incomes of less than $300,000 for most. That means that high income taxpayers don't get all the tax breaks you think. They pay quite a bit of taxes, trust me.
Finally, even if we rehauled the tax code (which there are items that i definitely think need to be redone (AMT), there is still one problem - you have to define income - there are so many ways to get income that no matter what there will still be debate as to what is taxable income.
2007-04-14 05:53:02 · answer #1 · answered by mariegailsweet 2 · 0⤊ 0⤋
A flat percentage of tax taken out of paychecks would result in low income people who now pay little or no income tax paying more, and high income people paying less. No, doesn't sound like a real good idea to me.
This wouldn't deal at all with the "under the table" income either.
2007-04-13 21:25:34 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
I disagree with a flat tax system the reason being is that it has no direct impact on certain social behaviors. The reason why so many deductions and exclusions exist in the US tax code is to try to guide and encourage certain behaviors. For instance the deduction for home mortgage interest helps taxpayers own their own home and energy efficiency credit helps the environment.
2007-04-13 21:21:41 · answer #3 · answered by Ski_Bum 3 · 0⤊ 0⤋
rich and middle class people like the idea. However it would hurt the poor, people on fixed incomes (seniors and disabled people), and the working poor.
2007-04-14 17:22:33 · answer #4 · answered by sophieb 7 · 0⤊ 0⤋