By Sarah Connelly With the 2016 election rapidly approaching and over a dozen Republican candidates vying for the party’s nomination, it seems like every one of them has come up with their own proposed “flat tax” plan. The flat tax aims to replace our current progressive tax system - in which one’s income tax rate increases with the amount of money they earn - with a single, unchanging tax rate for everyone, regardless of income.
Proponents of such a system praise its perceived simplicity and fairness; everyone carries the same responsibility, and the wealthy aren’t penalized. Everyone is treated as an equal. But the issue with programs like these is that not everyone is equal. It would be foolish to ignore the fact that in America, we have a huge disparity between the rich and the poor. Only very small minority of our population is very wealthy. Just those in the approximate top ten percent of the population earn six-figure salaries or more. On the other hand, almost 47 million of us are living in poverty and struggling to support themselves and their families.
And yet even with poverty being the widespread issue that it is, almost every proposed flat tax system shifts the burden from the wealthy onto everyone else. Most plans suggest a rate of anywhere from 17-20%, which means lower earners would be paying more and high earners would be the only ones getting a break. Increasing the taxes of those who struggle to pay them seems to be completely at odds with the whole point of the flat tax: fairness.
But putting fairness aside, the other main appeal of a flat tax is its simplicity - no more brackets, no more deductions, no more estate tax or capital gains tax or gift tax. A flat tax system in its purest, simplest form would be so easy, it could effectively eliminate the need for the IRS. The only issue is that most of the current realistic flat tax proposals leave most of these provisions as they are. Rand Paul’s seemingly well-liked plan to “blow up the tax code” leaves mortgage interest and charity donation deductions alone and adds a value-added tax (essentially another sales tax), effectively squashing the idea of flat taxes being “simple.” Paul isn’t the only one with a tax plan that falsely claims to be simplified. Newt Gingrich, Ted Cruz, and Rick Perry have all suggested similar flat plans in the past; their systems all propose taxing net income, after deductions and exemptions and credits, rather than gross income, which leaves a very messy and complicated system that is riddled with loopholes, just like the one we use now. None of this is meant to suggest that a hypothetical flat tax is a bad idea. It would be great to be able to file your taxes in five minutes without the help of lawyers and accountants, to pay the same rate as everyone else no matter how much you or they earn, and to only be taxed on earned income, without worrying about deductions or exemptions or having to pay other taxes, like the death tax or taxes on capital gains. But as lovely as that dream is, it just isn’t realistic. None of the flat tax plans out there are actually as simple or fair as we’d like them to be, and any that are just aren’t viable. The truth is that flat taxes hurt the lower class, reward the wealthy, and are just as confusing and complex as the current progressive tax system, leaving plenty of loopholes for people to take advantage of. Flat taxes would be a nice idea in a perfect world, but until we live in one, the progressive tax system is the only feasible one for America.
0 Comments
Leave a Reply. |
Elena Caputo
Hi! My name is Elena, and I'm a senior at Wilson and one of the Editors of the Editorial section. If you have any questions or ideas or if you want to write, email me at [email protected]! Olivia MonosHello! My name is Olivia and I'm a junior this year, and one of the editors of the Editorial section! I'm really excited to write for the Paw Print again this year!
Archives
December 2019
Categories |