Flat Taxes.

[krazyace5]

I hear about these from time to time, can someone post some pros and cons on this? It seems like it could be a good idea. Then again I guess if you were making big bucks it would probably suck. Would this be good for middle class?

What would the percentage likely be?

Thanks

[Wake up CALL]

Steve Forbes has probably gone farther than anyone else in defining how a flat tax plan would work. Below is a link with a simple explanation of his proposal:

Flat Tax by Steve Forbes

Keep in mind someone else may have drastically different ideas on how to implement a flat tax. I chose to link to the Forbes plan since he is well known, in the financial biz and one of the few to outline the details rather than just say "A flat tax is better".

[Easy E]

What it doesn't give details on is the final effect on government revenues and any required gov't RIF.

[andyfox]

It would be great if you're making big bucks, because just about all of the flat tax proposals involve a substantial lowering of the top bracket.

The flat tax is just a euphemism, in fact, for lowering the top bracket. Most exponents of the flat tax, with the exception of the now politically marginalized mayor of Oakland Jerry Brown, are conservatives who are always looking for ways for their rich friends to have to trickle down less than they already do.

In fact, we already have a flat tax, when one considers the effect of all taxes, not just income taxes. The payroll tax is a particularly egregious regressive tax that counteracts the effect of the progressive income tax.

My guess is that eventually 1) we'll have a VAT; and 2) social security taxes and funds will be intermingled with general revenues.

The flat tax is a simple idea by and for simple minds.

[Chris Villalobos]

Forget it. Flat taxes will never happen even if they are better than the current system. Just look at all the Tax Accountants that will become unemployed. Can you say lobbyists?

Chris V

[adios]

Accountants should be in demand for quite some time methinks. The problem with the US income tax code is that defining income for all income earners makes the tax code very complicated. It's the life blood of special interest influence.

[adios]

The lowest wage earners (I think up to 30k per household) have the earned income credit available to them which offsets their payroll taxes. Also their is a max amount paid in payroll taxes per tax year. But yeah it's a regressive tax on the middle class.

[adios]

I like a lot of Forbes's ideas. Won't see the light of day though IMO.

[pudley4]

regressive (def.) - 3 : decreasing in rate as the base increases <a regressive tax>

A flat tax stays the same, regardless of whether your income goes up or down.

[Jim Kuhn]

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Also their is a max amount paid in payroll taxes per tax year.

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I think you are mistaken. There is no cap on the payroll tax. Are you thinking of the social security tax?