Flat Tax is Good for the Economy

Four Points on how Flat Tax is bad for the Economy1. It will overwork an already overworked system:(http://www.npr.org...) The reality is very simply that the IRS is suffering, and has suffered, and likely will continue to suffer budget cuts. Normally this means nothing to us as tax payers except a slower refund but it also means that the auditing system is now almost defunct and even with advanced systems like the DIF score (http://www.irs.gov...) for statistical value there's simply not enough personell. Flat Tax only invites people who are not going to pay anyway likely due to lower income to simply not pay anyway and no one will be able to track them because the main manpower will be focused on the greatest revenue sources which spreads an already thin workforce even thinner.2. The Math is bad.Using a simple math layout allow me to give the values of taxation for a 100k, 50k, and 20k earner as "Single" individuals with no dependents using a modified percentage method (for ease of understanding) using 2015 tax tables (http://www.forbes.com...).So a 100k earner's "natural" bracket is 28% in taxation or $28,000 before deductions and itemization (which will not be gone through due to the difficulty of things like AMT (http://www.irs.gov...) which drastically changes how taxes work in higher earning brackets) so taking this into account as a simpler example.A 50k earner would have a tax rate of 25%.A 20k of 15%.Let us set our hypothetical value at 20%. This makes sense as the goal of the flat tax, to give a "break" to the high end earners and make the low-end "pay their share" (http://www.heritage.org...):"The tax system should ensure the lowest-income citizens do not see their limited resources depleted by taxation; the tax system should also ensure that everyone else is paying in to cover the cost of government. Too many taxpayers today pay little or no income tax, placing an ever-greater—and unjust—burden on those who do pay tax and creates a dangerous dynamic in which large numbers of citizens receive government services they perceive to be free. Many previous and otherwise fine tax reform proposals, such as the well-known traditional Flat Tax, which achieve other worthwhile goals, would have the unfortunate effect of increasing the number of citizens outside the tax system."So continuing with the math there's now an 8% and 5% tax cut for the 100k and 50k citizen respectively and a 5% increase for the 20k citizen, which ironically induces greater hardship on the lowest income tax payer, but let's see the savings in numbers:8% of 100,000 is 8,0005% of 50,000 is 2,500This creates a 12,500 dollar liability to taxes.5% of 20,000 is 1,250 in total so it would take 10 common workers for just one of both pair combined to compensate for the liability. If you want to have it in a different light it would take two lower earners to compensate for one medium earner and three for a highest earner's tax cut. Now I want you to note that this sounds great but let's introduce a millionaire.The millionaire would have a bracket of 39.6% or a tax of 396,000, at 20% that is a massive 196,000 dollar change which is equivalent to 157 (156.8) common workers just to make up for that deficit at the 20k level. I need not express what happens if a person makes over one million dollars but at current there are 10.1 million millionaires in the US (http://www.cnbc.com...) so take the difference of 196,000 and multiply it by 10.1 million and you get a deficit that has to be made up for of $1,979,600,000,000. Divide that number by the $1,250 "increase" to the lower wage earners and you would need a total of 1,583,680,000 individuals to make up for that deficit alone. I'll put that in words: One BILLION five-hundred eighty-three MILLION, six hundred and eighty thousand. Note that the United States doesn't actually have a billion people (http://www.census.gov...) so that's quite a problem. Flat tax is hilariously inefficient when it comes to raising governmental funds because the deficit in taxation is large enough to cover the literal value of Bill Gates (http://www.nbcnews.com...) at $81,000,000,000 (which let's not even go into how big his tax cut would be) 24 times and that's just for millionaires not including higher earners or any other class of earner. Most of the united states earns less than (http://politicalcalculations.blogspot.com...) the 50,000 bracket and furthermore the 20,000 bracket is close to the median of 26,000 so that means that there would be A) an even larger decifit since many individuals are actually getting tax cuts which begin at an income of 36,900 of 5% and B) no one to make it up.3. There's no alternative funding.First and foremost personal taxes make up a decent portion of tax money but not all of it and corporate taxes (which have even better rates that individuals presuming again a simplified version of taxation to avoid the complexity of the actual code) [http://blogs.wsj.com...] however a fair amount is still withheld or "passed through" corporations on to investor burden and true taxation on corporations reads as higher (due to the passthrough) than the 16.9% cited. As corporations are paying less and less and now the general public is also taking a huge tax cut while simply taxing the poor all the more this simply generates absolutely no revenue for the government at hand since passthrough values reported on forms 1099i are still capped off as part of the whole investment.4. It presumes everyone will pay their taxes and that loopholes will be eliminated by "transparency".Which is naive. The deficit just got worse and there's nowhere near enough people to enforce it nor is there any real value to taxing the poor since all federal programs and state programs that support the poor come from tax dollars (effectively making them not pay tax) so what exactly is being paid for and by whom? Is the State expected to begin more enterprise funds and become "for profit"? The Municipal bonds issues by the State are tax free so does that change? None of this cited because none of this is actually answered for; where exactly are the answers to these complex questions and how exactly will itemization, AMT, and various other factors work? Also how will EIC, child credits, and various other credits often claimed including dependency work? Will MFJ be effected versus single and will sole proprietorships still be doubly taxed? This is no simple task and there are a lot of answers missing.