Reply #16: Nah... [View All]

the flat tax is horribly regressive. Divide the amount of money spent by the national income and get a number. Include Social Security, Medicare, and other such current deductions from you paycheck.

Note that anyone who inherits money or has "unearned income" is out of this loop. Are they going to be taxed in some other way?

Eliminate common exemptions that lower wage workers depend upon, if it's to be a truly flat tax. Remember, though, that the median family income is under $50,000 a year, which means half the families in the country make less than that.

So, now we have a truly flat tax that those in the lower half will love, since they will now pay more than they did the old way. If we increase their exemptions, or reduce their tax liability some other way, we have to then increase the base rate to raise the required money.

No matter how you cut it, the government wants X dollars, and if the wealthier don't cover it, guess who will? Think you can reduce the government's demand for money? Fat chance!

The idea that people won't work if they are taxed is based partly on truth and partly on myth. During the 50's we had tremendous growth with enormous tax rates. So does Sweden and a few other countries now. So, this is not necessarily true in practice.

Hourly workers may notice that they can make $100 in OT and $80 of it is taxed. This obviously sucks, but could be avoided with a different type of progressive tax schedule. Entrepreneurs aren't bothered by that, since they are more interested in the growth of wealth and capital than of income, and that isn't necessarily affected by income taxes.

The flat tax was simply a scheme for Steve Forbes to pay less taxes on the money his father made, Nothing more. Nothing less.