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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. There are many advantages of flat tax, too.
The first advantage of a flat tax is that it would cause a faster economic growth. A flat tax would mean increased work, savings, and investments. By doing this there would be an increase in the economies long-term growth rate. If the flat tax increased with a the growth rate as little as 0.5 percent, then the income of an average family of four after ten years could reach up to $5,000 higher than it would be if the current tax laws remained in effect. This is one reason why it would not only be a good idea to have a flat tax, but as you can see this would help out some families that are in need of financial help.
Second, if we had a flat tax there would be more simplicity and fairness. A flat tax would treat all people equally from the wealthy to the not so wealthy. Even though a flat tax would be more regressive than the current system, winners and losers will widely vary.(Entin, Stephen) All taxpayers, from a simple business man to someone making sandwiches at Subway, would be able to fill out there tax return on a postcard-sized form. With doing this the compliance cost would drop by tens of billions of dollars. The current tax code requires taxpayers to devote about 5 billion hours each year to there tax returns. With all this time there is still no guarantee of accuracy. The new forms would cut this time very reasonably. The current tax forms are so complex that even tax experts make some mistakes. If there was a wealthy man with 100 times the taxable income of another tax payer, he would pay 100 more times in taxes.
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A problem with our current tax system is that it is just unfair. It often has different tax burdens on different people with the same incomes. With a flat tax and its single low-rate, it would ensure that all taxpayers would pay their fair share. This would eliminate all tax loopholes. It has been said that the burden of a flat tax will be placed on the shoulders of the rich.(Paul, Ron)
In conclusion a flat tax would reduce the federal government's power over the lives of taxpayers and get the government out of the businesses of trying to manage the economy. There will probably never be a perfect tax for our economy, but a flat tax is about as close as we can get. A flat tax would get the economy where it should be. A flat tax would raise the revenues of government demands. Tax laws should not be used to affect social policy.(Safire, William) I believe that a flat tax would be a good idea. I actually had no idea what a flat tax was until I started to do this report, and I feel that a flat tax would help out our economy a whole bunch.
Entin,Stephen 1995. "Treasurt Trips Over Flat Tax Facts." Washington Times (Jan. 4)
Hitchens, Christopher 1994. "Minority Report," The Nation (Dec. 12) p.716
Paul, Ron 1982. "The Flatter the Better?" The Inguiry (Sept.), pp.29-33
Safire, William 1982. "The Flat Tax." New York Times (April 30)
Tannerwald, Robert 1983. "Redistribution of Wealth in Conservation to a Flat Rate Tax." New England Economic Review pp.5-17