ANSWERS: 2
  • The only disadvantage that I see is that it dis-incentivizes some spending. When I don't have the option of deducting some expenses, it makes me think a little harder if I want to spend the money. Other than that, I think a flat income tax is a great idea.
  • A flat tax means it is the same rate for everyone. A sales tax is a flat tax on the goods that are affected. Canada uses this method for the PST and GST. In the case of the US income tax we use a progressive tax...from -0% to the high 30's% I believe. The best part of a flat income tax is that everyone pays something. This is good for people to feel involved, feel like they are doing their share, which they should feel. The down side is that the US spends way too much money on giveaway programs that the flat rate would be hard for the bottom end of income earners to pay. In my opinion.
    • mushroom
      If a flat tax includes a large standard deduction, then it is semi-progressive and provides relief for those at the very bottom. But flat has to mean flat - all gains taxed at same rate, no "welfare" credits for having more kids, no "corporate welfare" credits or discount rates including "like-kind" exchanges, "pass-throughs" and "bonus depreciation." As Warren Buffet said, "I’ll probably be the lowest paying taxpayer in the office,"

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