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A Flattened Income Tax Essay

2874 words - 11 pages

Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” Taxes are meant to fund the costs associated with running the government (Brough 1). In order for any government to function properly, some form of taxation is required (Bartlett 49). In spite of this, the method of collecting taxes, along with who is taxed, varies. One type of tax is the personal tax, which includes the tax on incomes (Burman 21). The current income tax system in America is a progressive tax (Duby 1). James Fellows defines a progressive tax as “one that causes the taxpayers average tax rate to increase as the taxpayer’s income increases” (5). Recently, the progressive tax has been criticized for hurting the common standard of living (Skipper 461). Today, the average income tax in America is eighteen percent; although that number differs depending on what tax bracket a person falls (Merino 40). In general, when one brings in an income of $16,000 or less, he no longer has to pay taxes (Duby 1). The progressive tax is just one of many ways the government can collect income taxes. Another way of collecting income taxes is by using a flat rate. Americans should implement a flat tax on incomes because the tax system would be simpler, fairer, and promote work and education.
A flat tax is a tax in which the rate of taxation is consistent regardless of the income level (Fellows 1). There have been many proposed plans for a proportional, or flat, tax (Fox 255). Alvin Rabushka and Robert Hall were the first to create a comprehensive proposal for the flat tax in 1981 (Skipper 463). Hall and Rabushka suggested that a rate of nineteen percent would cover the amount of taxes being brought in at the time (Bartlett 171). Then, in 1982, the Joint Economic Committee and the Senate Finance Committee seriously considered the flat tax during multiple hearings that were held (Bartlett 171). In 1992, Jerry Brown ran for President on the platform of the flat tax (Duby 1). In addition, Richard Armey created a revised flat tax plan in 1994 (Fellows 1). One of the most well known proponents for the flat tax is Steve Forbes, who made the flat tax a hot topic when he ran for President in 1996 (Fox 255). Many of these reformers implemented additional forms of taxation to their proposals.
The income tax is a type of personal taxation, but there are types of impersonal taxes that are often included in flat tax proposals (Burman 6). For example, a consumption tax is sometimes associated with a flat tax (Burman 107). Consumption taxes tax a person’s standard of living (Cobb 2). A flat consumption tax is different than a flat income tax in that only wages and benefits are assessed (Shafroth 2). In the 1990’s, Republicans introduced the idea of a national sales tax along with the flat tax based on income (Gephardt 1). With the idea of a national sales tax, savings increase because it only taxes money that a consumer spends (Gephardt 2). Each proposal for a flat tax is...

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