Flat Tax System Essay

2264 words - 9 pages

The current tax system is extremely complicated and punishes those who are successful by taxing people more than the average citizens. If flat tax were to be in the United States it would create fairness within the economy and be less complicated. Flat tax would not punish people for having higher income; instead flat tax would create equality to all tax payers. The taxpayers would not be complaining to the neighbors or their close relatives about their tax rates and how different they are from each other. Despite the fact that federal employees would be out of jobs, the United States should have flat tax implemented because flat tax spans all income brackets of taxpayers and would have low rates with no deductions or exemptions.
A flat tax is a taxation system with a constant marginal rate that applies to individuals or a corporate income. Three different types of flat taxes exist: true flat rate income tax, Marginal, and flat taxes with limited deductions. True flat tax is a simple tax rate with no deductions or exceptions. Marginal flat tax is a flat tax with deductions allowed. Flat tax with limited deductions allows deductions on certain items including charitable deductions and home mortgage interest. Here we’ll look at the true flat tax rate and the positive influence that comes with it.
Flat tax will make taxes fair for all individuals in the United States. No matter what social class a person is, they will end up paying the same rate. An example is “A person who makes $100,000 a year paying 20% taxes pays $20,000. A person, who makes $50,000 a year paying the same 20% tax rate, pays $10,000” (Forbes). This is fair for all people because they will pay the same tax rate and get a little more money to keep for themselves. Flat tax is also fair for all people is that it would surprise people by letting them keep more of what they earn and by lowering barriers. People can have more of what they earn and not worry about getting taxed too much.
Even though, flat tax will have federal employees out of jobs it is still a good idea to have flat tax. Flat tax is good because “in addition to the income tax, the federal government imposes payroll tax, death tax, and a slew of excises. The New Flat Tax replaces them all for individuals, families, and businesses with one tax system with one tax rate of roughly 28 percent” (The New Flat Tax: Encourages Growth and Job Creation). This is a good because they pay more attention on people and their family and where they work. Flat tax is also good because “the new flat tax retains the Earned Income Credit to preserve the level of income support for low wage workers. And low and middle-income families also receive a tax credit of $3,000 ($2,500 for singles) toward the purchase of health insurance” (The New Flat Tax: Encourages Growth and Job Creation). This is good because people who need to go to the doctor or get medication can help them with the extra money they have.
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