Assuming you want to keep tax revenue the same, we're talking a $27k tax bill for each adult based on 2023's numbers (nothing newer was available).
Ordinary workers get shafted by taxes going up (rough guess, under $200k/year income) A few (TBH I'm not sure how many, really) pay about the same. Really high-income people make out like bandits.
If you think the economy is harsh for "regular joes" right now, oof. You're in for a doozy.
A flat rate typically implies a set percentage of income, regardless of how much you make, with no breaks or reductions.
So, a 10% flat rate on someone who only makes $30,000 is $3000, while the guy who makes $5,000,000 pays $500,000.
Okay. Thank you? I think you replied to the wrong person. I wasn't asking for the definition of a flat rate income tax.
Flat taxes impact the poor dramatically more than the rich. I think that's the last thing we need right now.
Explain
If one earns $10,000 per year, a $2,000 annual tax is 20% of annualized income.
If one earns $100,000 per year, it’s 2%.
The less one earns, taxes are a greater proportion of total income.
Often, flat tax concepts come (or should come with) tax exemptions for actual low-income folks.
A flat tax would be a set percentage of total income. It would cause the rich to pay more since they wouldn't have their deductions and loopholes, that's why there's so much bullshit propaganda against it.
Even if it works exactly like that, let's say you are poor and barely make enough to live, you still have to give 20% (as an example) to the government, even if you are fucked after and can't pay rent or buy food. If you make 20% more than you need, you end up with nothing left after. Rich people may end up paying more, sure, but a flat tax still screws over the poor as a rule unless there is some provision that it only starts after X income, and you know that threshold will always be set too low.
The rich also have a hell of a lot more to tax. They SHOULD be paying a higher percentage of their wealth in taxes because they've gotten a much greater benefit out of the services those taxes pay for than a poor person.
If you make $50k annually and are taxed at a flat 25%, you're paying $12,500, leaving you with $37,500.
If you make $500k annually are are taxed at a flat 25%, you're paying $125,000, leaving you with $375,000.
It's a hell of a lot more difficult to support yourself and your family on $37,500 than it is on $375,000.
I think your question needs some clarification. By "flat rate" do you mean a fixed percentage income tax on individuals, or a fixed percentage consumption tax like a universal sales tax? If it's an income tax, do you only tax wages or do you also tax interest, dividends, and capital gains? Would any deductions be allowed? Is it only a tax on individuals' income or do you also tax money earned by legal entities like businesses or investment trusts? If it's sales tax, do you exempt necessities like food or medicine from the tax?
Are you getting rid of income tax, or changing the income tax system to a flat rate?
Because those are two different things.
I think they mean getting rid of income tax, and putting a flat (higher) rate on sales tax.
Mississippi is planning on doing something like that soon.
Mississippi is planning on doing something like that soon.
I think "don't do what Mississippi does" pretty much answers this question.
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