Jake Nieman

Jake Nieman
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South Brunswick, New Jersey, U.S.A
Birthday
March 02

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Salon.com
APRIL 21, 2010 6:11PM

Why the Flat Tax is not so Flat

Rate: 1 Flag

So the biggest dream of any of these nut job Tea Party folks is a flat tax, of about 15%. That's the number I see most often as being a "fair" tax.  So this idea is that everyone, no matter what they make (except those below the poverty line I assume) pays x% for my purposes I will use 15%. So whether you make $50,000 or $5,000,000, you still pay 15%. Now proponents claim that this is a very fair tax because everyone is paying 15%, and they claim it is progressive because the rich do end up paying more, due to the fact that they pay a percentage and not a set rate of say $5,000 per person. So in my example, someone making $50,000 per year will pay approximately $7,500 dollars in income taxes.  Now the person making $5,000,000 would pay approximately, $750,000 in income taxes. So on paper this looks great. The rich pay more because they can but it is more fair, because everyone is paying the same percentage of income.  But where this "brilliant" idea falls flat on it's face is when you realize what is left over and what can be afforded with it. It turns out that this "fair and flat" tax actually turns out to be regressive, not in that it puts the burden of funding the government on the poor but those hurt most by it, are the lower income.  So poor people have less money then wealthy people, this is obvious. Though they are not rich, they still have to live: buy food, pay for electricity and phone, pay for medical bills, and yes taxes.  Because these less fortunate people make less money, a greater percentage of there income goes towards those necessities.  So what this means is that if the poor are paying the same as the rich, the hit being taken by them is still much greater then it is for the wealthy. When you take $7,500 out of $50,000 you are left with $42,500. In some parts of the country this is ample, and allows for a good middle class life. But in other parts of the country (where I live in NJ is a great example of this)  this amount would not pay for groceries and a mortgage let alone trips and college tuition. Now on the other hand if you take $750,000 out of $5,000,000 you the wealthy individual is left with $4,250,000 dollars. More then enough to pay for almost any extravagance. Now I know, these people are entitled to their wealth they worked hard... BLAH BLAH BLAH. But lets remember here so did the poor man, and yet they are the ones who suffer from taxes. The rich are the ones who most complain about taxes and yet many of them do not even pay. They shelter it in Swiss and Cayman bank accounts. Now here's a novel idea, maybe if they actually paid their taxes the government wouldn't have to have such high rates.  It is my, humble and honest opinion that a progressive tax is the fairest tax. People often complain that "oh i could have bought a house with the money the government stole (taxed)" and you know what that means... you can still buy a house... maybe even two. Yes progressive taxation makes those who have more wealth pay more money, but it also is the best way to make sure our government is strong, stable, well funded, and able to act on what it must.

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a flat tax could be fair. clip off 'x'% of every transaction and divert to the national treasury. that way, everyone supports the state in proportion as they get material benefit from it. this would be very easy to do in an age of electronic money.

but then poor people would have to pay taxes, on their loaf of bread? yes, so they should. if they need assistance, give it to them, separately. pay everyone a 'citizen's wage.'

tax relief is a grossly ineffective way to deliver charity. more important, politicians must be kept from buying votes through tax relief. their only tool of election and re-election should be a record of effective planning and administration.
Again, with a consumption tax, it hurts the poor much more then the rich, and that 7 cents on that dollar loaf of bread is a big deal if you are living paycheck to pay check