It's Time For America to Adopt a Flat Tax

It's Time For America to Adopt a Flat Tax

Length: 1366 words (3.9 double-spaced pages)

Rating: Excellent

Open Document

Essay Preview

More ↓
I’ve always wondered who, as a child, when being asked what they want to do when they grow up says “I want to sit in front of tax forms and memorize tax codes all day”? Well a future CPA would, that is who. Most people in everyday life don’t want to know about tax codes and reasons why you should buy this thing at one time and not the other for tax purposes. Most people just want to go through life and be taxed accordingly and what they believe is fair. The question for almost everyone in our country right now is what is fair? Is the tax code right now fair? Or is it so complicated that some people slip through the cracks in the shuffle?
I believe most people now days would agree that the tax code is far from perfect. One of the biggest problems with today’s tax code is that it is too complicated. It isn’t the issue of what one person or one time frame made our tax code so complicated. It is that we have had the same tax code for centuries and year after year we just keep piling on more and more additions to it so by this point there are so many hidden pieces that it tends to be a pile of problems. People that should be taxed more are able to slip through without any taxation because of some technicalities of that year. So many times we see politicians put a law into effect that will allow one class of people to get away with no taxes for a certain year just so they can get more votes and support for reelection. There are too many loopholes and it is too complicated for the normal person which is what keeps a CPA in business. The problem is with only those people knowing what is going on it is not the mass’s and we need the mass’s to understand the tax code and know what is going on to keep politicians in check.
So what is the answer and how do we solve this problem? With a very large change in our tax code, and a shift in our thinking of how people should be taxed. Flat Fair Consumption Tax; this is our answer for most of the problems with tax codes. “Consumption is income less savings. Thus, the only difference in principle between a consumption tax and an income tax is the treatment of the savings.

How to Cite this Page

MLA Citation:
"It's Time For America to Adopt a Flat Tax." 123HelpMe.com. 18 Nov 2019
    <https://www.123helpme.com/view.asp?id=235588>.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

The World Has Gotten Flat Essay

- The world has gotten flat. With the triple convergence it made it so people all over can work together and complete a task. The world has gotten flat. With the triple convergence it made it so people all over can work together and complete a task. With the world becoming more open it has caused the issue of when should a government delegate jobs to other countries and when should they keep them within the country. With the world becoming an opening playing field how someone can become untouchable, how can they adopt to the situations around them....   [tags: United States, Unemployment]

Research Papers
1178 words (3.4 pages)

Essay on A Flattened Income Tax

- Albert Einstein once said, “The hardest thing in the world to understand is the income tax.” Taxes are meant to fund the costs associated with running the government (Brough 1). In order for any government to function properly, some form of taxation is required (Bartlett 49). In spite of this, the method of collecting taxes, along with who is taxed, varies. One type of tax is the personal tax, which includes the tax on incomes (Burman 21). The current income tax system in America is a progressive tax (Duby 1)....   [tags: Government Finances, Loophole]

Research Papers
2075 words (5.9 pages)

The Flat Tax Essay

- The national debt is growing and the government is unable to keep up under the current Progressive tax system, in the United States. A solution for the United States debt is to switch to a flat tax system. A switch to a flat tax system would simplify the tax process, it would make taxes fair and even, and it would allow the government to reduce the United States national debt. A flat tax system is a system that taxes every individual at the same percentage. It is not like any system the United States has seen before....   [tags: Tax Policy]

Research Papers
1969 words (5.6 pages)

Essay on A Flat Tax Is A System Of Taxation

- A flat tax is a system of taxation that taxes at a uniform rate, regardless of income level. In the United States we currently use a progressive tax system, which means that high-income earners pay taxes at a higher rate than low-income earners. A flat tax rate is a tax system can uses a constant percentage as a deduction, which is applied to individual income. There are various tax systems that are labeled a flat tax even though they are significantly different. A true flat rate tax is a system of taxation is where one tax rate is applied to all personal income with no personal deductions....   [tags: Tax, Progressive tax]

Research Papers
1206 words (3.4 pages)

Implementing A Flat Tax System Essay

- 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. II. Implementing a flat tax without significantly increasing the deficit is impossible without shifting the burden from the rich to the middle-class, instead our current progressive tax policy needs to be changed so that it is simpler and does not allow corporations to abuse the tax loopholes....   [tags: Tax, Taxation, Progressive tax, Income tax]

Research Papers
1141 words (3.3 pages)

The Flat Tax Is Not A Good Idea Essay

- You might have heard politicians in the news, talk about overhauling our evil, corrupt, and unfair current tax system and replace it with the godsent fix-all flat tax- which is having everyone, regardless of income, pay the same rate. This would simplify our overly complicated tax system and might sound appealing at first glance, but there are serious problems with the flat tax. Implementing a flat tax without significantly increasing the deficit is impossible without shifting the burden from the rich to the middle-class, instead our current tax policy needs to be changed so that it is simpler and does not allow corporations to abuse the tax loopholes....   [tags: Tax, Taxation in the United States, Taxation]

Research Papers
839 words (2.4 pages)

Flat Tax System Essay

- 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....   [tags: marginal tax, income tax]

Research Papers
1738 words (5 pages)

Flat Tax Essay

- 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....   [tags: tax system, economy, United States, taxpayers]

Research Papers
1681 words (4.8 pages)

Essay on Flat Tax

- Flat Tax Support for a flat tax has been urged in the past few months by House Majority Leader Richard Armey, a republican from Texas. Richard Armey has put forth a lot of effort of support for a flat tax. Under Richard Armey's proposal, a family of four could have the first $36,800 of their total income free from taxes. As coming from a family that barely gets buy, a flat tax would help all people in need. There are three major flat taxes, first there is a single flat rate, second elimination of deductions, credits, and exemptions, and last a non-double taxation of savings and investments....   [tags: Papers]

Free Essays
516 words (1.5 pages)

Flat Tax Essay

- Flat Tax Our current income tax system today is very complex, unfair, inhibits saving, investment and job creation, imposes a heavy burden on families, and weakens the integrity of the democratic process. It can't be fixed and must be replaced. The U.S. income tax code is a long and complex system. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms. The IRS sends out eight billion pages of forms and instructions each year. The administrative costs of the tax system far exceed those borne directly by the IRS....   [tags: Papers]

Research Papers
1330 words (3.8 pages)

” (Gale, 1995) The Flat Fair Consumption Tax (FFCT for short) is based on the exact opposite of how most tax revenues are created today. Right now we are taxed on the front end and some on the back end, meaning we pay taxes when we earn income and pay taxes when we spend our income. The FFCT tries to shorten these concepts by taking away the tax on the income side so that you get your whole check up front. On the flip side this type of tax would only have taxes on the sales tax side of things; basically you would have a very high tax only when you buy things. William Gale explains it perfectly in her journal Flat Tax when she explains “An income tax taxes savings both when the money is earned and again when the savings earned interest. A consumption tax taxes only once. Although this difference appears simple, consumption taxes come in many forms.” (Gale, 1995) What this does is create an easy tax code, everyone understands, and that is very hard to get away from.
One of the problems that arise time and time again with the current tax code is that illegal immigrants and people who get paid under the table aren’t taxed from their income. This creates a huge dent in our government revenue and makes it very hard to keep it fair to everyone else who is paying large amounts for working legally. With a FFCT this would eliminate this problem, because everyone would only be taxed on what they purchased. Everyone has to purchase things in the US to survive, so everyone will be buying things, which are taxed at a high rate, and everyone will be taxed equally. You’re probably asking yourself but why should someone who makes less money than I do pay the same in taxes that I do, that doesn’t seem fair.
The FFCT tax is actually taking that into account by the way it is designed. People who are in a higher income bracket spend more money which means that they are taxed at a higher rate. They buy bigger houses, nicer cars; spend more monthly on trips and food, all in all they will be taxed at a higher rate because they spend more. Some critics of the FFCT say those that make more will cap on their spending and start saving and investing because they don’t want to be taxed anymore and in turn would further the old money generations because they would be passing more and more wealth to their heirs. John Gross from ConceptualMath.org does some comparisons and does have some great statistics on why he thinks this would be a problem. He did a statistical analysis on different types of wage earners and classified them into categories of: low wage, middle, wealthy, and ceo’s. He shows how every class other than the Low wage people will find ways of getting out of paying taxes. His biggest problem is with the CEO group stating “For the CEO fully half of his income will go untaxed, since he does not need to spend it. The consumption tax might encourage him to spend a little less on luxuries, so that he can keep his investments high. Regardless of the choices he makes he will have no reason to give up any comforts.” (Tanner, 2009) The interesting part of this argument is that there is no difference in how much someone with lots of money will want to spend weather they are being taxed one way or the other, people with money spend money.
Recently there have been many more supporters of a flat tax system coming forward to voice their opinion. The renowned Tea Party movement, as a general consensus, is very in favor of a flat tax system where we don’t receive eighty five percent of our government funds from five percent of the population. One of the biggest things that people are saying about the FFCT is that it would be fair across the board with who is taxed and who receives a free meal. On the website wordwiz72.com Douglas Dunn states “The notion of a flat tax does have a certain simplistic, egalitarian appeal. But it has three main flaws: 1) it seems to improve something that is already completely equal.” (Dunn, 2006) He believes that the tax code at this point is already fair, and he goes on to explain his point by stating that people who make more money should be paying more taxes to help those who do not make as much and this makes our tax system fair. This to me is the exact opposite of fair; I don’t believe people work so hard and work all of their life to become wealthy just to be punished for all of the success they have had in their lives.
There are so many reasons on why this tax idea should be implemented like no double taxation, or no special preferences, no capital gains, and no territorial taxation, but one of the biggest is that it is family friendly. There are pieces of this tax code that would help the needy and the lower income brackets. Such as the family friendly part, where if you are under thirty thousand a year in income for the family and you have dependents you are not taxed as much as others in a form of a refund at the end of the year. Other stop losses and other ideas are put into place if the FFCT was put into place to protect people and their families. So you might be wondering at this point if this tax system is great why we are still on the old system. Why hasn’t this been implemented into our society yet and why aren’t more people on board with it? There are many reasons why this hasn’t been implemented from corrupt politicians to jobs and money. Politicians are their because we vote them in, if they don’t have the votes then they don’t have a job next year. FFCT is not a widely educated option out there and most Americans don’t know about it. It is not what you would call a popular choice in our media now days. If we don’t see people liking it and a politician wants it to be implemented he won’t get the votes which mean no job. The masses want the government to help them, and the masses are the ones who are voting.
Also there is money to be made off of the complexity and the way the tax system is set up at this point. Many people have jobs just specifically because the tax system is so complex and difficult. When you think of changing all of the tax code to something that is so easy anyone could do their taxes you have to consider how many jobs would we lose? The FFCT is a CPA’s worst nightmare; they are all about taxes and bank their whole livelihood on the complexity of taxes. CPA’s make a living off of the average American not knowing enough to know the ins and outs of the American tax code. Going to a flat tax code would eliminate the need for CPA’s in this country and we would see a huge decrease in jobs. The question is, is it worth losing some jobs to fix our tax system and better our country. This could be a make or break in our economy now days and after about five years we would see all of the CPA’s get other jobs and they would move into other fields. We have to look at the big picture there, what is more important, our country or the couple of downsides these naysayers argue. We haven’t been able to cover everything in this short amount of time but just the basics and ideas behind having a FFCT system. For some great references and some good explanations of what a flat tax system is go to www.heritage.org and look up flat tax. They also have a great Q and A section that really helps to put things into perspective of what we are really talking about with a flat tax system.



Works Cited

A CPA’s Worst Nightmare

I’ve always wondered who, as a child, when being asked what they want to do when they grow up says “I want to sit in front of tax forms and memorize tax codes all day”? Well a future CPA would, that is who. Most people in everyday life don’t want to know about tax codes and reasons why you should buy this thing at one time and not the other for tax purposes. Most people just want to go through life and be taxed accordingly and what they believe is fair. The question for almost everyone in our country right now is what is fair? Is the tax code right now fair? Or is it so complicated that some people slip through the cracks in the shuffle?
I believe most people now days would agree that the tax code is far from perfect. One of the biggest problems with today’s tax code is that it is too complicated. It isn’t the issue of what one person or one time frame made our tax code so complicated. It is that we have had the same tax code for centuries and year after year we just keep piling on more and more additions to it so by this point there are so many hidden pieces that it tends to be a pile of problems. People that should be taxed more are able to slip through without any taxation because of some technicalities of that year. So many times we see politicians put a law into effect that will allow one class of people to get away with no taxes for a certain year just so they can get more votes and support for reelection. There are too many loopholes and it is too complicated for the normal person which is what keeps a CPA in business. The problem is with only those people knowing what is going on it is not the mass’s and we need the mass’s to understand the tax code and know what is going on to keep politicians in check.
So what is the answer and how do we solve this problem? With a very large change in our tax code, and a shift in our thinking of how people should be taxed. Flat Fair Consumption Tax; this is our answer for most of the problems with tax codes. “Consumption is income less savings. Thus, the only difference in principle between a consumption tax and an income tax is the treatment of the savings.” (Gale, 1995) The Flat Fair Consumption Tax (FFCT for short) is based on the exact opposite of how most tax revenues are created today. Right now we are taxed on the front end and some on the back end, meaning we pay taxes when we earn income and pay taxes when we spend our income. The FFCT tries to shorten these concepts by taking away the tax on the income side so that you get your whole check up front. On the flip side this type of tax would only have taxes on the sales tax side of things; basically you would have a very high tax only when you buy things. William Gale explains it perfectly in her journal Flat Tax when she explains “An income tax taxes savings both when the money is earned and again when the savings earned interest. A consumption tax taxes only once. Although this difference appears simple, consumption taxes come in many forms.” (Gale, 1995) What this does is create an easy tax code, everyone understands, and that is very hard to get away from.
One of the problems that arise time and time again with the current tax code is that illegal immigrants and people who get paid under the table aren’t taxed from their income. This creates a huge dent in our government revenue and makes it very hard to keep it fair to everyone else who is paying large amounts for working legally. With a FFCT this would eliminate this problem, because everyone would only be taxed on what they purchased. Everyone has to purchase things in the US to survive, so everyone will be buying things, which are taxed at a high rate, and everyone will be taxed equally. You’re probably asking yourself but why should someone who makes less money than I do pay the same in taxes that I do, that doesn’t seem fair.
The FFCT tax is actually taking that into account by the way it is designed. People who are in a higher income bracket spend more money which means that they are taxed at a higher rate. They buy bigger houses, nicer cars; spend more monthly on trips and food, all in all they will be taxed at a higher rate because they spend more. Some critics of the FFCT say those that make more will cap on their spending and start saving and investing because they don’t want to be taxed anymore and in turn would further the old money generations because they would be passing more and more wealth to their heirs. John Gross from ConceptualMath.org does some comparisons and does have some great statistics on why he thinks this would be a problem. He did a statistical analysis on different types of wage earners and classified them into categories of: low wage, middle, wealthy, and ceo’s. He shows how every class other than the Low wage people will find ways of getting out of paying taxes. His biggest problem is with the CEO group stating “For the CEO fully half of his income will go untaxed, since he does not need to spend it. The consumption tax might encourage him to spend a little less on luxuries, so that he can keep his investments high. Regardless of the choices he makes he will have no reason to give up any comforts.” (Tanner, 2009) The interesting part of this argument is that there is no difference in how much someone with lots of money will want to spend weather they are being taxed one way or the other, people with money spend money.
Recently there have been many more supporters of a flat tax system coming forward to voice their opinion. The renowned Tea Party movement, as a general consensus, is very in favor of a flat tax system where we don’t receive eighty five percent of our government funds from five percent of the population. One of the biggest things that people are saying about the FFCT is that it would be fair across the board with who is taxed and who receives a free meal. On the website wordwiz72.com Douglas Dunn states “The notion of a flat tax does have a certain simplistic, egalitarian appeal. But it has three main flaws: 1) it seems to improve something that is already completely equal.” (Dunn, 2006) He believes that the tax code at this point is already fair, and he goes on to explain his point by stating that people who make more money should be paying more taxes to help those who do not make as much and this makes our tax system fair. This to me is the exact opposite of fair; I don’t believe people work so hard and work all of their life to become wealthy just to be punished for all of the success they have had in their lives.
There are so many reasons on why this tax idea should be implemented like no double taxation, or no special preferences, no capital gains, and no territorial taxation, but one of the biggest is that it is family friendly. There are pieces of this tax code that would help the needy and the lower income brackets. Such as the family friendly part, where if you are under thirty thousand a year in income for the family and you have dependents you are not taxed as much as others in a form of a refund at the end of the year. Other stop losses and other ideas are put into place if the FFCT was put into place to protect people and their families. So you might be wondering at this point if this tax system is great why we are still on the old system. Why hasn’t this been implemented into our society yet and why aren’t more people on board with it? There are many reasons why this hasn’t been implemented from corrupt politicians to jobs and money. Politicians are their because we vote them in, if they don’t have the votes then they don’t have a job next year. FFCT is not a widely educated option out there and most Americans don’t know about it. It is not what you would call a popular choice in our media now days. If we don’t see people liking it and a politician wants it to be implemented he won’t get the votes which mean no job. The masses want the government to help them, and the masses are the ones who are voting.
Also there is money to be made off of the complexity and the way the tax system is set up at this point. Many people have jobs just specifically because the tax system is so complex and difficult. When you think of changing all of the tax code to something that is so easy anyone could do their taxes you have to consider how many jobs would we lose? The FFCT is a CPA’s worst nightmare; they are all about taxes and bank their whole livelihood on the complexity of taxes. CPA’s make a living off of the average American not knowing enough to know the ins and outs of the American tax code. Going to a flat tax code would eliminate the need for CPA’s in this country and we would see a huge decrease in jobs. The question is, is it worth losing some jobs to fix our tax system and better our country. This could be a make or break in our economy now days and after about five years we would see all of the CPA’s get other jobs and they would move into other fields. We have to look at the big picture there, what is more important, our country or the couple of downsides these naysayers argue. We haven’t been able to cover everything in this short amount of time but just the basics and ideas behind having a FFCT system. For some great references and some good explanations of what a flat tax system is go to www.heritage.org and look up flat tax. They also have a great Q and A section that really helps to put things into perspective of what we are really talking about with a flat tax system.

Works Cited
Dunn, D. (2006). Flat Tax Fiasco. Retrieved March 5, 2011, from Wordwiz72: www.wordwiz72.com/flattax.html
Gale, W. G. (1995). Flat Tax. Retrieved March 5, 2011, from Urban: www.urban.org/uploadedpdf/1000530.pdf
Tanner, K. (2009, June 27). Tax Reform: The Effects of a Flat Tax or Comsumption Tax on Individuals. Retrieved March 5, 2011, from Conceptual Math: www.conceptualmath.org/philo/taxesspending.htm

Return to 123HelpMe.com