Progressive Taxation (Pro) vs Flat Taxation (Con)

Um...It actually is a slippery slope and simply inaccurate. Let's take this in two parts: examining your sequence of events, then talking about the history of progressive taxation. I extend all arguments but also add Part 1: Refuting Your Event Sequence Note: You said that all the earnings in our scenario were per month, but I presume you mistaked this for per year as making $520,000 per year certainly does not qualify for middle class. [1]http://www.pewresearch.org... First off, taxing the middle class at 35% or the 1% at 50% is both inaccurate (in the sense that it does not reflect the current tax code) and also unrealistic. Not even liberal politicians would propose said tax for those making $10,000/year; it is actually more around 15% of income, excluding potential tax deductions on mortgages, etc. [2]http://taxfoundation.org... As for Joe, the rich person our hypothetical, it is highly unlikely that he actually pays this much in taxes, due to deductions, loopholes, and the grandest of all these loopholes, the capital gains deduction. Capital gains (income earned from the sale of stocks, bonds and dividends) likely provide for a significant portion of Joe's income. [3]http://www.cnbc.com... These capital gains are actually taxed at a much smaller percentage of his income, meaning in reality, a large part of his income can be taxed at a lower rate(28%), which can also be avoided by merely holding assets until death. [4]http://taxfoundation.org... Although, we're not done there: Joe could also deduct up to 1,000,000 for his mortgage, among many other loopholes. In the end, he really only pays an effective tax rate of about 24.7%, or he could join over a thousand millionaire families reporting nothing in taxes. [5]http://www.americansfortaxfairness.org... Also, I'll bet you Joe doesn't move out of the country as things are going pretty well for him; given that 95% percent of growth in income since 2009 has gone to people like him. [6]https://jobmarketmonitor.com... Secondly, let's be sure to note that if Joe's company left the country (which is a challenge given the licensing, factory issues, etc.), it would not be because of a progressive personal income tax, which is not paid by his company. Let's not mix up our terms. [7]https://www.thebalance.com... Outsourcing is NOT the fault of progressive taxation and your entire simulation is based not on progressive taxation, but the effects of outsourcing. Let's follow the scenario though, even though it would not be avoided by a flat tax. The poor man (John) is unemployed, resulting in the increase of unemployment benefits. Since the need would be higher under a flat tax for unemployment benefits (as the poor man would pay more in taxes under a flat tax system, thereby needing more to avoid bankruptcy). As such, in order to prevent John's bankruptcy, more in benefits must be provided under a flat tax. Why? Under a flat tax system, John would pay more in taxes, meaning his income is lower and he needs more help to sustain himself. Also, since reasonably rated flat taxes usually bring back less revenue to the government, the conservative politician behind the flat tax would be forced to either let John starve and go homeless or raise taxes or take on extra debt. To watch what I mean, let's follow your model based off of solely the consequence of flat taxation, without even talking about the inevitable outsourcing, which would excaberate this process. 1. John and Peter's disposable incomes are decreased, as under a flat tax system, they are forced to pay more in taxes. What is the result of this? Common sense leads us to say that they spend less money on Joe's consumer goods, so his business collaspes. 2. Joe is forced to lay off some workers because he is returning less money. It's smart business for Joe, though by this point he has lost out on plenty of profit. 3. John and Peter lose their jobs and have even less disposable income to spend on Joe's company, and the country tanks into recession. 4. Uncle Sam is probably forced to borrow money to keep the economy afloat, resulting in massive debt, stagflation, high unemployment, extreme poverty, and a lengthened second great depression. Argument 2.) History of Progressive Taxation The most progressive point in American tax history was back in the Eisenhower 1950s, where the top income tax rate was a whopping 91%. [8]https://www.yahoo.com... During the 1950s, things were acutally going pretty well in terms of economic growth: In fact, in 1955, GDP growth was 9.37% on the year, a remarkable amount. Incomes rose across the country, middle class families were better off and the economy was rolling.[9]http://www.multpl.com...[10]http://www.history.com...Progressive taxation has had a record of success in the American economy, and since it is the most equitable system as demonstrated in Round 2. To the contrary, flat taxation sucks purchasing power away from middle and lower class Americans, thereby weakening the whole economy.On top of this, I extend all previous arguments.