Musings on the evil “Flat Tax” – Enemy of Economic Justice in America
No matter how you look at is the “Flat Tax” fails the 99%.
The Center on Budget and Policy Priorities' Jared Bernstein on the Flat Tax:
BERNSTEIN: What you're going to end up with is something that sounds a lot more fair than it really is and interestingly, people get that now. When people say they want a fair and an equitable code, they don't mean that everybody should pay the same amount in dollar terms. They don't mean everyone should pay the same amount in percentage terms.
They mean they want a progressive system where the rates are graduated. The rates go up as income goes up. Now, if you implement the flat tax, and this has been simulated many, many times over, you're going to actually increase the tax liability of people in the middle of the scale and you're going to significantly lower the tax liability of the people at the top.
This would exacerbate after tax inequality. So it goes exactly the opposite direction of what you want a tax code to do and interestingly and I think importantly, people recognize that.
MSNBC Hosts A 'Fair And Balanced' Debate On The GOP's Flat Tax Plan
Is a Flat Tax a Good Idea? US News & World Report
NO – Cutting Taxes for the Rich Never Ends Well
John Irons Research and Policy Director at the Economic Policy Institute
NO – Secret of the Flat Tax: Middle Class Pays More So Rich Pay Less
Dean Baker Author of 'The End of Loser Liberalism: Making Markets Progressive'
NO – Flat Tax Will Benefit Only the Rich
Steve Wamhoff Legislative Director of Citizens for Tax Justice
NO – Flat Tax Would Introduce New Problems
Kelly Phillips Erb Author of Taxgirl Blog at Forbes.com
NO – Flat Tax Shifts Burden to the Middle Class
Charles B. Rangel U.S. Representative
Is a Flat Tax a Good Idea? US News & World Report
Recent Daily Kos Tax Articles
Taxing Rich at Same Rate As Poor Would Raise $200 Billion For States
We All Pay Higher Tax Rates Than The Rich: A Lesson In Class Warfare
Voodoo Trickle Down Be Damned
Ben Carson says he'd install a flat tax and ignore the Supreme Court
Other links:
Fox's Chris Wallace Exposes Truth Behind Ben Carson's Flat Tax Plan: "The People Who Make Out Like Bandits...Are The Wealthy"
Problems with a flat tax
The notion of a flat tax does have a certain simplistic, egalitarian appeal. But it has three main flaws: 1) It seeks to improve something that is already completely equal; 2) It forces middle-class taxpayers to subsidize the wealthy (especially those incarnations such as Forbes' that exempt "unearned" income such as the interest on his invested inheritance, so that working people would support the idle rich); and, 3) It confuses much-needed tax reform and tax simplification in defining taxable income with the unrelated issue of whether the rate applied to that income is flat or graduated. Anyone who wants to support a flat tax better run the numbers first and see how much more they're going to pay! Flat Tax Fiasco by Douglas Dunn
Finally what is fair?
Bernstein has been writing about this issue for a very long time now. Here's more from a post of his from back in 2012, which for the most part is still applicable today: What’s Fair? Five (or Six) Principles of Tax Fairness:
This word “fairness” keeps coming up around tax day, particularly in discussions around the Buffett rule.
Many have questioned what I and others mean by “fair.” I’ve got five answers. A fair tax system should be:
1) Progressive: those with more income pay a larger share of it in taxes;
2) One that doesn’t exacerbate inequality by giving preferential treatment to the wealthy (e.g., by favoring capital over labor income);
3) One that doesn’t disproportionately benefit those who are already doing the best at the expense of the rest;
4) One that raises enough revenue from those with lots of resources to provide a leg up for those at a disadvantage;
5) One that does not rearrange the pretax income distribution, as in a confiscatory, highly redistributive system;
MSNBC Hosts A 'Fair And Balanced' Debate On The GOP's Flat Tax Plan