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 ec...
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...www.heritage.org/research/factsheets/2012/01/the-new-flat-tax-encourages-growth-and-job-creation>.
Pethokoukis, James. "Fix, Don't Flatten, the Tax Code." Nationalreview.com. National Review Online, 28 May 2013. Web. 19 May 2014. .
Phillips, Kerk. "A Flat Tax Is Not Incapable of Funding the Government and the Poor." DeseretNews.com. Deseret News, 19 Feb. 2013. Web. 19 May 2014. .
"Tax Brackets." Bankrate.com. Bankrate, n.d. Web. 18 May 2014. .
"What Are the Advantages and Disadvantages of Adopting a Flat Tax in the US? - Ask TaxGuru." Ask TaxGuru RSS. N.p., n.d. Web. 17 May 2014. .
Whether or not to keep or discard the Bush era tax cuts for the wealthy, give tax breaks to the lowest tax bracket, and even throwing out the entire current tax code and replacing it with a simpler version, tax code and tax law has been a very controversial topic for the past few years. As it stands, the current tax code has over seventy two thousand pages, compared to the four hundred pages it had in 1913. There are many different stakeholders in this debate including taxpayers, corporations, businesses, etc. Americans for Tax Reform (ATR) is an organization that was “founded in 1985 by Grover Norquist at the request of President Reagan”(.N.p.). Their goal is to create and advocate for a simple flat tax,“...on the belief that they will provide a strong stimulus to investment, employment, and output” (Stokey 1). They promote their organization and represent taxpayers in all fifty states. Along with tax reform, ATR also advocates for individual health care, free trade, and spending transparency (.N.p.). Using very simple and easy to understand images, ATR is able to convey their goals and get information across to the general audience that visits their website.
The FairTax Act will replace these costly, oppressively complex and economically inefficient taxes with a progressive national retail sales tax, which would be levied on the final sale ...
Hall, A. (2001, August). The Flat Income Tax and the Fair Tax Consumption Tax: A
...e, Maxime, and Giuseppe C. Ruggeri. "Flat Taxes And Distributional Justice." Review Of Social Economy 56.3 (1998): 277-294. Business Source Premier. Web. 19 Jan. 2014.
I. You might have heard politicians in the news, talk about overhauling our tax system with a new fix-all idea, the flat-tax. This would simplify our overly complicated tax system and might seem appealing at first glance, however there are serious problems with it.
6. The flat tax replaces the current income tax code, which is very 7. complex, with a system so simple Americans could file their taxes on a 8. form the size of a postcard. What exactly is a flat tax? A flat tax sets 9. into place a single tax rate on all income subject to tax. The hundreds of 10. exemptions, credits, loopholes and deductions now in the tax system 11. would be eliminated to make the single tax rate as low as possible. The 12. cost of using the current tax system totals about $200 billion annually, 13. or $700 for every man, woman, and child in America. A flat tax would 14. reduce those totals by 94% , saving taxpayers more than $100
Many ponder the idea of federal taxes and whether the wealthy deserve to pay a higher percentage rate of their overall income. That is, they argue that because our society needs more equality and a lower national budget deficit, taxes on the rich must be raised. This specific topic has been discussed for decades, and due to the severely different perspectives, it is unclear whether the two sides will ever come to an agreement. President Barack Obama and much of the Democratic Party strongly lean towards raising taxes on the rich, while the conservatives and the Republican Party heavily lean towards a more balanced flat tax. However, after extensive research and focus on what would be best for the equality of individuals, the nation and its economy, this paper will firmly prove that the top one percent should not be taxed any more than they are today.
Tax season is upon us and many Americans are scrambling around trying to get theirs finished by the end of the dead line. This time of year is not a joyous occasion, everyone on edge most of them pondering how much they will have to pay. While others are wondering if they will get as much as they thought they will, or are they going to be one of the unlucky few to be audited? I am one of those people, anxious, and waiting at the edge of my seat for that hammer of reality to come crashing down over my head. With each new election year comes new arguments and battles fought within the halls of Capital Hill, but who is right and is there a middle ground? I will present you with the facts as I have found them; the choice is yours to determine what is right and what is wrong.
In “The Federalist No. 21” Alexander Hamilton addresses the citizens of New York concerning the issue of taxation. Hamilton (1787) writes, “It is a single advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed, that is, an extension of the revenue.” The advice given by Hamilton in 1787 is the backbone of the FairTax Act. The FairTax or bill H.R. 25 is not a flat tax or a VAT tax. It is a tax on consumption. The FairTax is a twenty-three percent sales tax levied on all new goods and services. The FairTax replaces all current federal taxes imposed on the people of the United States. This includes all personal and corporate income taxes. The twenty-three percent tax is not imposed on old or used items. It is applied only to new items. The FairTax is levied on all services, even on doctor’s visits. Educational institutions are the only exceptions to the rule. The FairTax is revenue neutral, meaning it provides the same amount of federal income as the current system. To prevent the FairTax from becoming an undue burden on the poor, a monthly prebate is paid to every family (Americans For Fair Taxation 1007). The prebate is equal to the amount of taxes a family pays on all purchases up to the poverty level. For instance, if a family was estimated to spend $26,400 a year on basic necessities, based on a 23% sales tax, their annual tax burden would be $6,072. This tax burden is paid to the family in monthly installments at the beginning of each month. With this prebate, all families living under the poverty level will pay no federal taxes (Boortz & Linder 2005). Arguably, the most app...
The U.S. along with only 6 other countries use the progressive tax, the progressive tax is a very unfair and inconsistent taxing system.This system has a varying rate that taxes the higher income homes with a higher rate,and the lower with a reduced rate.The Flat tax is a taxing system that has one flat tax rate for all ranges of income homes. The flat tax has been proposed multiple times throughout legislation , but not once has it been taken seriously as a cure to fix the current tax problems.The U.S. needs to adopt the Flat Tax because it is a simplistic system that would be fair to use and also promote economic growth.
Introduction Taxes; who benefits and who gets ripped off focuses mostly on Federal and county taxes and not on state taxes. This report aims to give the reader some insight on taxes: Why we have them, what types of benefits they supply, who benefits from them, and who gets screwed by them. It informs the reader of the different types of taxation, where the money comes from and where it goes. How can people avoid some tax increases? But most of all, this report informs the reader that there is an incredible amount of money being wasted by the federal government through overspending and irresponsible behavior of government departments. This overspending has created a deficit that has caused billions of dollars in damage to the credit of the country. As a result of these excess taxes, the American taxpayer is getting ripped off by paying for waste in government. Most people in this country are being ripped off in the amount of taxes they pay due to corruption gover...
The flat tax will make taxes fair for all people. No matter what race a person is, what social class a person is in, or who they’re friends with, they will end up paying the same rate. Every single taxpayer will have to sacrifice just as much of his or her life as the next person down the road. One of the three main reasons for taxes is to maintain fairness. This is most reasonable ways to maintain fairness. The wealthy will still be paying more money than the poor person, but they both have the same tax burden.
The government use of taxes plays a crucial role in today’s economy as well as personal finances, it has and will continue to leave its mark on the world we live in.
Gurría, Angel. "Improve tax fairness and help the developing world." OCED. Organisation for Economic Co-operation and Development, 24/04/2009. Web. 9 Oct 2011. .
The purpose of this paper is to illustrate the layout of taxation. I will differentiate the types of taxes and the roles that they serve currently. Subsequently, I will explain what equity, efficiency, effectiveness and transparency (EEET) are and show how they apply to taxation as a whole. Lastly, I will conclude how the EEET applies to the four tax types.