Assuming you want to keep tax revenue the same, we’re talking a $27k tax bill for each adult based on 2023’s numbers (nothing newer was available).
Ordinary workers get shafted by taxes going up (rough guess, under $200k/year income) A few (TBH I’m not sure how many, really) pay about the same. Really high-income people make out like bandits.
If you think the economy is harsh for “regular joes” right now, oof. You’re in for a doozy.
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Flat taxes impact the poor dramatically more than the rich. I think that’s the last thing we need right now.
Explain
If one earns $10,000 per year, a $2,000 annual tax is 20% of annualized income.
If one earns $100,000 per year, it’s 2%.
The less one earns, taxes are a greater proportion of total income.
Often, flat tax concepts come (or should come with) tax exemptions for actual low-income folks.
Are you getting rid of income tax, or changing the income tax system to a flat rate?
Because those are two different things.
I think they mean getting rid of income tax, and putting a flat (higher) rate on sales tax.
Mississippi is planning on doing something like that soon.
Mississippi is planning on doing something like that soon.
I think “don’t do what Mississippi does” pretty much answers this question.
Washington state has also never had an income tax and uses sales tax but makes many essential items tax free to try and be less of a burden on the poor
I have to agree with you, our politicians aren’t exactly the sharpest eggs in the attic.
To get funding he have now just for the military budget look up the Gilded Age but worse. The investment class goes hog whild and poor people and lower middle class will be destitute. We are talking the state taking 99.5% of your check if you make under a certain wadge. Where as people like zuck have to pay with what fell out of their couch cushions.
Intuit would lose fuckloads of money.
What do you mean by flat rate?
Depending on what your question is asking, search around for Steve Forbes Flat Tax or Ross Perot Flat Tax.
I may have this wrong, but I recall Steve Forbes was proposing to decomplicste the IRS tax codes and implement a flat IRS income tax. In other words, remove the tax brackets and have everyone pay a fixed percent regardless of income.
Similarly, I recall Ross Perot propose that the US remove income tax completely and instead charge a flat tax on purchases (sales tax). If memory serves, it was 13% (inn, addition to state and local sales taxes).
In my uneducated opinion, both of these seem like good ideas at first. Who wouldn’t want a simpler tax code? Upon deeper inspection, I feel like both plans would favor wealthy Americans more than “the average Joe”. As said in other posts here, the wealthy report having less income through deductions and other financial wizardry and the unrich spend a greater percentage of their income on day to day expenses.
Poor people would have it worse because basic necessities aren’t (1) optional and (2) not priced dependent on income. The first certain amount of income for everyone must be spent on staying alive (food, medicine, water, etc.) and having somewhere to exist (rent/mortgage). Whatever is left over can be spent on high quality of those, hobbies, and luxuries. That means that the lowest earners spend their life merely surviving with no joy or options. They just try to exist until they can’t. Higher earners can afford to consume higher quality basic necessities and have options (e.g. beef, organic, etc.). The even higher earners can spend their extra income on enjoying hobbies and luxuries. Beyond that, people can spend their money on making more money and directing the economy (aka investments).
By charging a flat rate, poorer earners would be getting taxed almost exclusively on surviving. The highest earners would be getting taxed very little on surviving, so they would have a lot more money left over to afford luxuries and making more money. Because of this, most liberal economies use a progressive tax code (i.e. higher tax rates on higher income brackets). It allows people to survive while limiting the runaway effect from the highest earners making money exponentially. This would then destroy the economy because no one would be able to afford anything and the economy would halt. I mean, it’s still happening, but not as bad as if it were a flat tax rate.
What I think happens is that the rich control the levers and the poor are the masses. People that write tax codes have to make sure to balance the two. If it tips too much one way or another, we have problems. Too in favor of the rich (e.g. flat tax rate) and there would either be an economic depression or the masses revolt. Too in favor of the masses, and the rich form a coup or run with their money to another country and develop the economy there.
I think your question needs some clarification. By “flat rate” do you mean a fixed percentage income tax on individuals, or a fixed percentage consumption tax like a universal sales tax? If it’s an income tax, do you only tax wages or do you also tax interest, dividends, and capital gains? Would any deductions be allowed? Is it only a tax on individuals’ income or do you also tax money earned by legal entities like businesses or investment trusts? If it’s sales tax, do you exempt necessities like food or medicine from the tax?
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You dont know what this community is about, huh?
