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I'm Pro Flat Tax

I'm a person that likes simplicity, so that is why I'm pro flat tax. I have taxes taken off my pay check before I even get my money, but I still have to file taxes. I don't enjoy filling out 9 pages of information on taxes I've already paid, but this is how the government works.

To show you the magnitude of how complex our progressive tax system is, think of the amount of jobs people have to just do government tax work. Just think of every business out there that has 1, 2 or 3 payroll employees working full time. Think of how big a department of a large corporation has working, just on payroll. That doesn't even include taxes. Huge sums of people have these jobs that produce absolutely no benefit to the world. All they do is go through the red tape of government.

Think of how many good paying jobs that would be created for people if we had a simple tax system. These jobs would now be more important to the economy because they add benefit to people, not just wasting time following government guidelines.

I'm pro flat tax because it is so simple. You pay a flat percentage of what you make, no matter what. Let's say it's a 10% flat tax. If you make $500 for a week of work, you pay a $50 tax. If you make $1000 for a week of work, you pay a $100 tax. If you make $10,000 for a week of work, you pay a $1000 tax. Do you really need an army of payroll specialists to handle this? No. Most of this work can be done easily with a computer.

Where I live the taxes are pretty progressive in some ways. If you work your 40hrs a week, everything is fine. You pay taxes and that's that, but if you get the idea of working overtime, it's just not worth it. The government just taxes so much of it, it isn't worth your time. Most people would tell you if they work overtime, they would like to pay the same amount of taxes on that money.

Think of how beneficial it is for business. Businesses are put in the situation of looking for profits, but are limited by tax brackets. If your profit is $1 over a bracket, you might pay $100,000 more in taxes, if you made $2 less in profit for the year. Businesses are encouraged to get in under certain tax brackets by coming up with as many write offs that they can. If you just have a simple flat tax, you can eliminate a lot of the more stupid write offs and loop holes making a more fair market environment for business.

I'm also pro flat tax because of the added benefit and standard of living it brings. People in today's society are trained to look at profits as a bad thing, but profits are a good thing. Profits bring prosperity. Businesses now will be more driven to produce because they know they won't have to pay higher rates of taxes by being "too big". They'll work harder, they'll get more investment and hire more people.

The benefits of flat tax are huge and numerous. Most people against it think that it favors the rich. I'm not sure how that works since everyone is treated equally and the rich do end up paying more taxes. I think people have this ideal that the rich "owe them", when they really don't. This is why I'm pro flat tax.


Tony said…
A flat tax does not really benefit the rich. It treats all people equally with their income. The truth is that a progressive tax is designed to benefit the poor. Where the more disposable income you have the more you get taxed.

Last year as a college student I made about $9,000 working a part time job not only did I not have to pay taxes because of how a progressive tax works I got about $400 back as an earned income credit. If there was a flat tax it would not be something low like 10% it would be much higher like 25% as a low estimate and around 40% as a high estimate. If we take the low estimate i would have had to pay about $2250 in taxes plus social security and medicare. I did only work 9 months out of the year but during those 9 months I did not have any help from my parents dropping my income from $9000 to $7000 I would not have been able to do that. This is assuming not deductions and if we want our taxes to be simple we need to get rid of deductions.

The taxes are also designed so that you don't suddenly have to pay an extra %10,000 because you made $2 more. For example lets say no one is taxed until they make at least $12,001 in a year, and making that much lets say i am at a 5% tax rate. So if I make $12,000 I pay no taxes. If you make $12,001 you have to pay 5% taxes on the $1 you made over the $12,000, so $0.05. Now lets say the next tax bracket is at $12,501 and it is 5.1% tax. So if you make $12,500, you are taxed on $500, because no one is taxed for their first $12,000, at 5% and pay $25. If I make $12,501, I am taxed on $501 at 5.1% and pay $25.55 and I still have $0.45 more than you.

It took me a few mins to come up with the numbers so I could prove the point that by making 1 more dollar I am not losing money but it really wasn't that hard and I don't think that the people making the decisions on when tax brackets should change and how much the increase in taxes should be are idiots and they are gonna make sure that every tax jump works that so if someone make 1 more dollar they are going to have to pay an extra $10,000 in taxes. There may be points where making an extra dollar does incur more than one dollar in taxes but you can always make a charitable donation to bring down your taxable income. I would have tax book and do more calculations than I care to, to know for sure if there are any flaws like that in the tax code.

There would also probably still be deductions in a flat tax system meaning that if I made only $9000 last year I still wouldn't have to pay taxes and there would still be a few pages of paperwork to fill out.

If its really about the paper work being annoying you should just go for a regressive style tax, a standard sales tax, but this type of tax favors the rich. Since the poor are gonna spend almost all of their money and not save any they will be taxed on almost all of their income maybe even more if they spend extra on credit. While the rich who save a lot of their money will only be taxed on a small portion of it. This tax would need to be even higher than any flat tax rate so let just say 40%. If you make $12,000 and spend all of it you would have paid 40% tax or $4,800. Now lets say I am super rich and made $3,000,000. Well if i only spend $1,000,000 of it I pay 40% of $1,000,000 and pay $400,000. I may pay a lot more in taxes than you but I am only paying 13% tax on my income.

A flat tax is most likely going to be the same amount of paperwork as taking a standard deduction and the only real reasons to be in favor on one is because

1. You feel the income distribution is exactly how it should be and if people are poor it is always because they deserve it.

2. You are rich and do not want to be taxed so high.

3. You are rich and do not feel the government uses the extra you are taxed in a responsible way to benefit those who are not as fortunate as you and would prefer to donate to the poor in a way you find more effective. (really this one is the same as number 2 just giving people a easy justification for their greed)

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