You're exactly right about the regressive idea, but you can take it further than that by removing benefits all together. You still have a regressive system.
Imagine if someone made $500,000 a year. With a 20% flat tax, that person would pay $100,000, leaving that person with $400,000. Now imagine someone making $20,000 a year. They would have to pay $4,000 a year, leaving $16,000.
Now it's pretty obvious that it's easier for someone to live off of $400,000 than someone living off of $16,000. With someone living off of $16,000, a larger percentage of their income goes to necessities like electricity, rent and food (and other necessary consumables). If a person pays about $10,000 a year on such things, that only leaves $6,000 for the poor person. This is the only money that they can spend on other things like possibly saving up for a house or having a few more clothes. However, the rich person would still have $390,000 left to do with as he pleases.
Just this alone shows how regressive a flat tax really is. Personally, I don't know that we should force people into living at a subsistence level just because of federal taxes. But that's just a personal view.
I don't claim to know it all, I just claim to know what I have learned from economics.:)
Kyle Johnson
"We've upped our standards, now up yours!" -- Brad Donoho
Slashdot Mirror
You're exactly right about the regressive idea, but you can take it further than that by removing benefits all together. You still have a regressive system.
Imagine if someone made $500,000 a year. With a 20% flat tax, that person would pay $100,000, leaving that person with $400,000. Now imagine someone making $20,000 a year. They would have to pay $4,000 a year, leaving $16,000.
Now it's pretty obvious that it's easier for someone to live off of $400,000 than someone living off of $16,000. With someone living off of $16,000, a larger percentage of their income goes to necessities like electricity, rent and food (and other necessary consumables). If a person pays about $10,000 a year on such things, that only leaves $6,000 for the poor person. This is the only money that they can spend on other things like possibly saving up for a house or having a few more clothes. However, the rich person would still have $390,000 left to do with as he pleases.
Just this alone shows how regressive a flat tax really is. Personally, I don't know that we should force people into living at a subsistence level just because of federal taxes. But that's just a personal view.
I don't claim to know it all, I just claim to know what I have learned from economics. :)
Kyle Johnson
"We've upped our standards, now up yours!" -- Brad Donoho
"Cliff Lampe sheds light today on a book..."
I kinda find this ironic...was this choice of words intentional? :P
Just wondering...Kyle Johnson