Sunday, September 30, 2007
Steve Forbes and Flat Taxes
The United States’ current federal income tax system is extremely complicated. The tax code contains thousands of pages of rules that govern how income tax is collected. It is full of loopholes, exemptions, and inefficiencies. A flat tax system would, indeed, simplify the tax code.
In my opinion, a flat tax system it would not make the income tax system any more efficient than it already is. In fact, it would leave most people worse off. If a flat tax system is adopted, the rich and poor would reap its benefits, while the middle class would be “left out to dry.”
Steve Forbes is indeed a very rich man. When reading about his flat tax proposal you would see that he wants everyone that makes more than $36,000 per year to be taxed 17% of their income. If you make any less than that you will not be taxed. However, when thinking about this logically one can only reach one conclusion. Currently, the people in the highest tax brackets pay 35% of their income in taxes, while people in the lowest tax bracket pay 10%. According to the current tax brackets people that make $36,000 per year pay 25% of the income to taxes. What this basically means is that it is technically impossible for the government to collect as much revenue as it did under the progressive system.
If the government experiences major losses in revenue what will become of the economy? Where will the budget cuts be felt the hardest? Will the quality of roads and highways suffer? Will programs such as social security and medicare suffer? Who knows just what would happen if the government were to experience such a major loss of revenue… This is just a straight-up bad idea.
