Big Issues Challenge

Thanks to Con for the questions, I will do my best to answer them. Before I get into Q&A however, I'd like to address the Forbes' 'Flat Tax'. It is a Flat Tax in name only. In effect it would be a Progressive Tax, with lower rates than are present today in America. It is able to do this because of the tax deductions that would be given to people at different rates, creating a situation where some people would not be paying 17% and some would. They would be in unofficial tax brackets. This information comes from Con's link in the previous argument. I feel this is important to note as I continue with answering Con's questions, because certain benefits that receive mention in regards to the Flat Tax are not benefits that come about due to the fact that it's a Flat Tax, but rather they come about due to the its Progressive nature. Q&A 1) It depends on what you define as middle class. There are several different estimates, some place middle class as earning $36,000 to $57,660 a year[1]. Others believe that to be too narrow of a group, and extend it to $19,178 to $91,705, which accounts for 60% of US households[1]. Estimates for lower class often heavily factor in the % of Americans below the poverty line, which is 15%[2]. For a family of four, lower class is defined as $23,050 or less[2]. Based on these estimates and ranges we can take a look at our current tax bracket[3] and see where changes might occur. Now as I mentioned earlier, a Flat Tax that has unofficial tax brackets thanks to deductions is not really a Flat Tax. In the case of the Forbes' model it's just a tax system with lower progressive rates. Under such a pseudo Flat Tax, neither the middle class nor the poor would take the brunt of the Flat Tax, thanks to their deductions and exemptions leaving them with taxes they can handle. Under a real Flat Tax, using the narrow estimate of middle class earning, it is unlikely they would receive a tax hike[1][3]. With the broader estimate, the people on the lower end are likely to see a tax hike, but everyone else would be fine, with those on the upper end likely receiving tax breaks[1][3]. For those beneath the poverty line, you can see nearly every family would receive tax hikes[4][3]. To reiterate, this is under a real Flat Tax, not under a Pseudo Flat Tax such as Forbes'. Con asks what would the case be if the exemptions many poor people currently receive carried over to a Flat Tax. In that case they'd be fine, but then it wouldn't be an actual Flat Tax if they paid different percentages in actuality. 2) According Forbes' and his rate it would, yes. However this should not be considered desirable. The government has shown thus far that it is incapable of producing a budget that actually saves money to be put towards debt reduction. Why should giving them more do anything besides rack up a larger debt? That's like giving a substance abuser more of the substance they abuse and expecting they'll sell it instead of use it for themselves. Before any actions are taken to increase government revenue, the budget needs to be streamlined to maximum efficiency, to ensure there are no wasted dollars that could be used instead of asking for more. Currently we are not at a point of streamlined efficiency, as this debt clock shows[5]. 3) The three countries included in your question are often used as examples for the good a Flat Tax can do. But after looking up the Tax Systems for all three countries, I found again that they are creating brackets through deductions and exemptions[6][7][8]. I do not despise this Pseudo Flat Tax, it certainly seems to be working well. It can be equated to the same thing as a Progressive Tax System that simply has low rates, which is something I am certainly for. Closing: After reading Con's questions it is apparent to me that we are on slightly different pages as to what a Flat Tax is. I am arguing against a Flat Tax that gives across the board completely equal percentage tax rates. Many of the popular proposed plans and popular enacted plans do not follow this model. They follow a model that has a flat rate that is changed through deductions, essentially creating a Progressive Model with very low rates. Sources: [1] http://www.ehow.com... [2] http://money.usnews.com... [3] http://www.moneychimp.com... [4] http://20somethingfinance.com... [5] http://www.usdebtclock.org... [6] http://www.taxrates.cc... [7] http://www.worldwide-tax.com... [8] http://www.taxrates.cc...