Flat Tax

Flat tax may look nice, and fait, but when you look deeper into the issue, it is quite the opposite. The flat tax will benefit the rich, because they will pay less, and implementing a flat tax will hurt working class people. Implementing a flat tax, would only be fair if every person and worker made the same salary. [1] Opponents of the flat tax contend that the flat tax system penalizes the low-income segment of the population. Low-income individuals and families must spend money on the same necessities required by higher-income people. However, after the necessities are purchased, the poorer taxpayers, because they earn less, will have less money left over to pay taxes, at the same rate as those earning higher income amounts. Implementing a flat tax system could dismantle the IRS. A lot of people believe that a flat tax system reduces the taxes, and will benefit high-income earners. “For example, if the tax rate were 10 percent, then someone making $1,000 would have $900 spending income left after taxes. Someone who makes $10,000 is left with $9,000 after taxes; this inequity is thought to prove that a flat tax disproportionately benefits the rich. If the rich paid less tax, many believe that the government would lose significant revenue. A uniform tax rate treats individuals and corporations fairly, but it eliminates a backup revenue source, the extra dollars generated by taxing high-income earners at a higher rate for the government. The government relies heavily on revenue generated from income taxes. ” As we can see here, a flat tax will only benefit the rich, and not the working class. For low income taxpayers, implementing such a tax could lead these families into penury. Not only would a Flat-Tax be completely unfair, and hurt working-class families, but it would also hurt the economy. Let us use the state of Arizona for an example. [2] "The shifting of tax burden to low- and middle-income households will have a dampening effect on total demand and hence on economic activity in Arizona,…. . About 12 percent of taxpayers would pay less, all of whom earn $100,000 or more per year. "Although the flat tax bill anticipated to be presented in 2012 may be somewhat different, any flat tax bill if passed will cut income taxes for highest-income Arizonans and substantially shift tax burden to low-and middle-income households," according to the UA study. The study estimates that a flat tax, like the one proposed in the last legislative session, would shift $400 million of the states income-tax burden to families and individuals who earn less than $100,000 per year” People in the tax brackets earning more than $1 million would receive the largest cuts, at 45 percent, according to the study. Those earning up to $10,000 annually would see the largest increase, at nearly 10 fold. The $10,000 to $20,000 bracket would see an increase larger than 300 percent and people earning between $20,000 and $30,000 would see a 94 percent tax increase. ” As we can see, a flat tax is completely unfair to working class, low-income families, and would benefit the rich, a great amount; it is also very hurtful to the economy. IRS workers could also lose their jobs due to a flat tax. Sources: Sources: [1] . http://smallbusiness.chron.com... [2] . http://www.insidetucsonbusiness.com...