NationStates Jolt Archive

Why not a flat tax in the US?

The Black Forrest
27-09-2004, 19:10
Ok this is a boredom post of something that was probably discussed to death.

Why not a flat tax in the US?

1) Everybody pays a set percentage. No arguments. Keep the percentage low say 14% across the board.

2) Money could be saved by the goverment reducing the size of the IRS and the people involved making up the tax codes.

3) Money could be saved by corporations as they don't have hire tax firms to figure out the tax codes and loopholes.

4) No loop holes!

As I said. It's a boredom and a curiosity question considering the fact we have all sides of the spectrum here.....
27-09-2004, 19:20
Well, first of all, the reasons you just mentioned above are some of the most significant reasons why it would not be adopted. People only accept corporate taxbreaks to already profitable corps if they don't know that such tax breaks exist. It is therefore incumbent upon corporations and their lobbyists to keep the existing tax structure as loophole-prone as possible.

That being said, the biggest reason why you don't want a flat tax is because it tends to hit the people who can least afford it the hardest. Many people below the poverty line and in the lower classes pay little if any taxes, while on the other hand those in the upper classes pay the lion's share of income taxes (things get complicated when you factor in payroll taxes). This at first seems like an argument about fairness for the flat tax until you realize two things:

1) Those who pay the most also benefit the most from the existing social structure, so in that the people pay in proportion to what they get out of society, it is fair.

2) Those who lose the benefits that the existing social structure provides them to keep them afloat will likely turn to means of survival that threaten the existing social order in exchange. This increased crime threatens the property of those who allegedly benefit most from the flat tax.

As such, it's actually more beneficial in the long term to keep the taxation in the progressive model it is now.