The United States Should Not Impose A Flat Tax

1569 words - 7 pages

A flat tax is a system in which a person’s income is not a factor and a single rate is set for all taxpayers. This kind of tax includes no deductions or exemptions. The United State’s current, progressive tax is very different from a flat tax, the most noticeable reason being that a progressive tax takes different percents of income depending on what income bracket a person falls into (Investopedia). During 2010 in the United States, “individuals who earned up to $8,375 fell into the 10% tax bracket, while individuals earning $373,650 or more fell into the 35% tax bracket” (Investopedia). When using a progressive tax, there are also a slew of deductions that people can take to lower their taxes, but a flat tax does not allow for any deductions; everyone has to pay the set rate (Irons). A flat tax is not a new idea, even in the United States, it has been proposed multiple times. Not long ago, Rick Perry and Newt Gingrich supported the flat tax during the 2012 Republican Presidential Campaign (Pethokoukis). In other places in the world it has become widely accepted and has already been implemented in over forty countries. The idea started in Hong Kong in 1947, but became more popular in the 1980’s and 90’s. “Among the first countries to adopt a flat tax system were Latvia, Lithuania, and Estonia, in 1994” (Lewis). Other small countries such as Mongolia, in 2007, and Seychelles, in 2010. Eventually even Russia, a country of monumental size, joined the flat tax movement in 2001 with a rate of 13% (Lewis). In the United States, A flat tax could make taxes much simpler by replacing all other income, payroll, and death taxes as well as many other excises while still bringing a good amount of money into the government and improving the economy. However, there are some downsides such as raising taxes on the middle class while lowering taxes on the wealthy, as well as the pressure to cut vital government programs (Irons).
An argument that supporters of the flat tax make is that it is much simpler. The United States has many different taxes and tax deductions and thus makes it very tedious to figure how much a person would owe (Phillips). Kerk Phillips from Deseret News say that “there is no itemizing of deductions and the math is simple enough to do with a pencil and paper. There is no need for tax professionals or tax software”. Flat tax supporters also assert that the United State’s current tax system strains the economy, because they “discourage productivity, slowing the rise in wages and economic growth and making it difficult for businesses to compete globally” (The Heritage Foundation). The flat tax would also get rid of the double taxation on corporations, allowing them to grow, be more innovative, and hire more workers. The current system seems to higher-wage workers at a disadvantage by making them pay more, but if a flat tax was brought into effect, every worker would pay the same percent of income on their taxes (Phillips). A flat tax also...

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