Under a Flat Tax would the Wealthy still pay more money in taxes ?

[light200763]

When the Rich/Wealthy pay lower tax rates or if they paid a flat tax would the Rich still pay more money in taxes when the rich still pay more money in taxes since there will be more tax revenue because the economy will grow also 10% of a million dollars is more then 10% of hundred dollars and the Rich will have less reason to try to find tax loopholes and or tax shelters in other words the flat tax is progressive ?

A Brief Guide to the Flat TaxBy Daniel Mitchell, Ph.D.
July 7, 2005

Frequently Asked Questions

Q: Should the rich pay more?

A: Under a flat tax, the rich do pay more than the poor. A wealthy taxpayer with 100 times more taxable income than his neighbor will pay 100 times more in taxes. However, a flat tax does not impose special penalties on those who contribute the most to the nation's prosperity by subjecting them to punitive and discriminatory tax rates. For those who think the "rich" should pay a higher percentage of their income, the generous family allowance effectively creates a modest level of "progressivity." For instance, a family with an annual income of $20,000 faces a tax rate of zero. Wealthy taxpayers also benefit from the family allowance, but the effective tax rate on an income of $1 million will be only a tiny fraction below the statutory tax rate.

This approach is much fairer than the current system, which penalizes investors, entrepreneurs, and others who create wealth for the American economy while simultaneously providing myriad deductions, credits, exemptions, and other preferences that are much more likely to be exploited by upper-income taxpayers. The flat tax eliminates these special-interest loopholes, ensuring that the rich play by the same rules as other taxpayers.

http://www.heritage.org/research/reports/2005/07/a-brief-guide-to-the-flat-tax

[Ashhhhh]

Yes but normal people's brains can't handle that. The common person believes rich people are evil and need to be punished

edit: Just looked over it and it looks great. My new favorite tax system

[pcosmar]

If you have to have a tax, it would be fairer.

I would rather see Government De-funded to the point that it operates from a tip jar.

[light200763]

I don't agree with punishing the Wealthy with higher tax rates but the Democrats fail to understand that the Wealthy already pay most of the income taxes.

[kylejack]

Flat tax without a prebate raises taxes on the poor and middle class.

[Ashhhhh]

I like this a lot. I think Rick Perry wants to use a flat tax

[DamianTV]

If you have to have a tax, it would be fairer.

I would rather see Government De-funded to the point that it operates from a tip jar.

+Rep!

Military should hold Bake Sales the next time they want to order new Fighter Jets, not just use force to take what they want from people.

[oyarde]

Would they pay more than others ? Yes if they buy things that others do not , no , if they do not .

[CaptUSA]

Ron Paul fully endorses the Flat Tax.

He just thinks the rate should be real flat - like zero.

[VBRonPaulFan]

People skew this whatever way fits their ideology.

Under a progressive tax system like we have now, small govt minded people complain that those who do well pay a disproportionally huge share of the tax burden. Liberals debate that it's more 'fair' because those who 'can afford to pay' pay, and those who can't get a break.

Under a flat tax system like proposed above, Liberals debate that it is unfair because the poor pay a 'larger percentage of their income' towards taxes, and most small govt minded people argue that its the most fair to all because everyone has some skin in the game.

The best income tax system though, is no income tax system. The income tax system is a many tentacled monster that puts citizens against each other, has its hands in way too much of your personal information, and arguable violates your fifth amendment protection against self-incrimination.

[milo10]

A pretty good argument against a flat tax system is that the wealthy would tend to pay a much lower percentage of their discretionary income in taxes. Hence, it is in a real sense and on average regressive.

All income taxes suck. The best taxes are no taxes, with no govt. The 2nd best are taxes on pollutants, as the tax brings a social value by discouraging use or existence of the pollutant; and taxes that are very use-oriented, like a tax on contractual agreements that provides for govt enforcement of the contract.

[jt8025]

Flat tax without a prebate raises taxes on the poor and middle class.

If there is a prebate, it could be raised to lets say $250,000 and then only a small percentange of the voting population would be paying taxes. The 50% plus would vote in people who would keep the prebate high enough so that they would pay no taxes.

I would prefer no prebate. The voting in this country would change when people realize they have to pay for "free" services too.

[kylejack]

I don't favor raising taxes on anyone. Taxes should be lowered for everyone paying taxes, and remain 0 for those paying 0. Only exception would be to get rid of negative tax programs.

[light200763]

My understanding is that when the Wealthy get a tax cut they pay most of the taxes is there a reason for this thanks ?

[AlexAmore]

+Rep!

Military should hold Bake Sales the next time they want to order new Fighter Jets, not just use force to take what they want from people.

That sounds great but where do they get the money for the upfront investment of brownie ingredients?

[kylejack]

That sounds great but where do they get the money for the upfront investment of brownie ingredients?
Sell some old fighter jets.

[QueenB4Liberty]

I don't favor raising taxes on anyone. Taxes should be lowered for everyone paying taxes, and remain 0 for those paying 0. Only exception would be to get rid of negative tax programs.

I agree.

[Zippyjuan]

In dollar amounts, those at the higher end of the income scale would end up paying more than those at the lower income scales- simply because they have more income. What you would be doing is flattening a sloping curve- those at the higher end would end up paying a lower percent of their income than their present rate and those at the lower end would have their rate raised. This simply looks at marginal tax rates. Now if you don't change deductions, the wealthy will make out much better than those at middle or lower income levels because they can take advantage of more tax breaks. If all deductions were eliminated (including things like the personal exemption which excludes a minimum amount of income from taxation) those in the bottom half of all tax filers would see a significant increase in the amount of taxes they pay-- something like 43% of all tax filers end up owing zero in income taxes. http://www.cbsnews.com/stories/2009/04/15/politics/otherpeoplesmoney/main4945874.shtml

An astonishing 43.4 percent of Americans now pay zero or negative federal income taxes. The number of single or jointly-filing "taxpayers" - the word must be applied sparingly - who pay no taxes or receive government handouts has reached 65.6 million, out of a total of 151 million.

Those numbers come from an analysis published yesterday by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institution. Neither is a low-tax or conservative advocacy group; the Urban Institute was created under the Johnson administration during the Great Society era, and it receives most of its funding from the federal government.

"You've got a larger and larger share of people paying less and less for the services provided by the federal government," says Roberton Williams, a senior fellow at the Tax Policy Center. "The concern is that the majority can say, 'Let's have more benefits, spend more,' if they're not paying for it. It's 'free.' That's not a good thing to have."

By historic standards, today's situation is an aberration. Between 1950 and 1990, the number of owe-no-money federal tax returns averaged 21 percent, dipping to 18 percent in 1986, according to Tax Foundation data. In the 1990s, the owe-no-money percentage hovered around 25 percent of taxpayers.


For 2011, that number was up to 46%.