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Could a Flat Tax Work?

Updated on February 28, 2012


Recent reports have been released about the increasing percentage of Americans who do not pay taxes every year. Over the past thirty years, the percentage of tax paying citizens has continued to decrease. Within the past few years, that number has gone to around 50%. Yes, that means only 50% of Americans are paying taxes, while the other 50% do not. This may seem like a shocking number, but sadly, it’s true.


It’s staggering to think that only half of the nation pays taxes. Another statistic that is hard to believe is that the top 3% of tax payers makes up about an equal share as the bottom 97% of tax payers. The top 1% is responsible for around 35% of all taxes collected.


With numbers like this, it seems as though there are some problems to resolve. Obviously, the top 1% will always pay more because they earn more. Unfortunately, the 1% still continues to get hounded for more. The occupy movement has been going after the top 1% wanting more of their money, and legislation has even been proposed that could increase their tax rates.


This is the opposite of what needs to happen. The top tier is already bearing the blunt of the load. They do not need to be further burdened. It is not fair for them to have to essentially be punished for making more money. The economic system in the United States is supposed to function in a way that people can become as wealthy as they want. This is money they have earned through hard work. There is no reason they should have to share the wealth.


Many would agree that they system of taxation needs to be overhauled. Whether it is because of how complex it is to file or because 50% of citizens don’t pay federal taxes, issues with the system are easy to find. But what can be done? Solutions have been posed in the past and brought up in legislation, but no changes have been made.


One possible solution that has been brought up over and over is a flat tax. The flat tax would eliminate tax brackets and all of the specific details when filing taxes. With a flat tax, everyone’s tax rate would be the same, whether they made $10 or $10,000,000 for the year. For instance, say the flat tax was set at 10%. That means anyone, no matter what their income was, would pay 10% of it. This tax is fair across the board.


This would require anyone earning an income to pay taxes. It would help to eliminate the high number of people not paying anything. It would balance things out so that the top percentage of earners did not pay such a high percentage in taxes. It would also help move the country away rom the socialist trend it has been on. The rich would no longer be forced to support so many people living off entitlement programs because they would not have to share such a large percentage of their money. It is not for sure if this system could actually work, but as things stand now, the tax system needs fixed.


Would you be in favor of a flat tax?

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    • Mac31 profile image

      Mac31 5 years ago from United States

      I think that if they were to do a flat tax they would still have to break it up by the tax bracket that you are in. It would not be fair for a millionaire to pay the same taxes as someone making 45-65K and vise versa....

    • Joelipoo profile image
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      Joelipoo 5 years ago from Ohio

      @Mac - Thanks for reading and commenting. I'm just curious, why wouldn't it be fair for them to pay the same flat tax?

    • Mac31 profile image

      Mac31 5 years ago from United States

      Well the way that I see it is the more money you make the more you are going to be paying in taxes. I have thought about this as well, but I think that having a $5 tax fee eachmonth for everyone can actually help our failing system without having a big affect on people

    • ib radmasters profile image

      ib radmasters 5 years ago from Southern California

      Any tax based on Income has the same problems as we have with the current progressive income tax.

      Replacing the Income Tax with a National Sales Tax would be a fairer, minimal intrusive tax. It could mimic the state sales tax.

      I also don't believe in using percentages. There are probably forty million people in the country that are too young to pay taxes. And another forty million people that are retired. So that alone is a big number of the population.

      Then there are those people that are unemployed. How much taxing do you want on them.

      As for the rich paying the bulk of the taxes, they have a plethora of deductions, credits, trusts and other mechanisms included in the very large book called the Internal Revenue Code.

      Any tax should be helped by reducing the size of the overhead that creates the tax, the government.

    • Davesworld profile image

      Davesworld 5 years ago from Cottage Grove, MN 55016

      Don't confuse tax rate with taxes paid. A flat tax of 20% (about where it will have to be) works like this: if I make $10,000 I pay $2,000 in tax; if I make $100,000 I pay $20,000 in tax; if I make $10 million, I pay $2 million in taxes. The more I make, the more taxes I pay - what could be fairer than that?

    • Joelipoo profile image
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      Joelipoo 5 years ago from Ohio

      @ib - I'm not a fan on taxing and big government. I would love to see the government shrink down because it, along with taxes, has grown far too large. It is hard to figure out what could potentially work. The thing for sure is that our current system is broken.

    • Joelipoo profile image
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      Joelipoo 5 years ago from Ohio

      @dave - that's what I was saying in the hub and gave an example like you did. A flat tax like that where everyone pays an equal percentage of their income makes the most sense instead of the current tax brackets.

    • Mac31 profile image

      Mac31 5 years ago from United States

      Joelipoo - I must have understood you wrong on my last comment. I think that an equal percentage tax would be a pretty good idea, because I for one am getting the short end of the stick.

    • ib radmasters profile image

      ib radmasters 5 years ago from Southern California

      National Sales Tax would work

      Flat Tax is still and Income Tax

    • Joelipoo profile image
      Author

      Joelipoo 5 years ago from Ohio

      @Mac - Not a problem at all. I hope you quit getting the short end.

      @ib - I'm aware the flat tax is an income tax. I don't see an income tax dissapearing any time soon.

    • mattforte profile image

      Steven Pearson 5 years ago from Spanaway, WA

      To those saying it isn't fair because the rich would have to pay more - that makes no sense at all.

      Yeah, a millionaire would have to pay hundreds of thousands, maybe even millions in taxes with a flat tax. But it is the same PERCENTAGE of their income that everybody else would pay.

      To say that "oh they are rich so it wouldn't be fair if they paid more" makes no sense. A person who makes ten mil isn't going to have his life ruined by paying two mil. In all honesty, even a flat tax is going to affect the lower class people's ability to "get by" even more.

      This would be a tax on the gross income of the country. All the money that goes into pockets would have a percentage taken out. It's pretty simple. If Joe Average makes 50k and has to pay 5k in taxes...the opponents of this are trying to say that those who make 50 million should also have to pay 5k? That doesn't even make sense - nor is it fair. The country needs to get it's money somewhere....and the more we tax the poor, the more their lives get ruined. It is silly to think that some millionaire banker can make billions of dollars, paying no taxes, while paying the people that enable him to make that money $10/hour.

      Flat tax is the way to go.

    • Joelipoo profile image
      Author

      Joelipoo 5 years ago from Ohio

      @matt - you are reiterating the same point that Dave and I already made through our examples. The flat tax makes the most sense, and I'm not sure why people fail to see that. We could do away with all the rules and exemptions and just keep it simple.

    • Mac31 profile image

      Mac31 5 years ago from United States

      I kind of had a similar idea about a flat rate tax, but my reasoning was to have a fee applied at the end of each month like $5 a month for everyone that is working and everyone that is getting some type of government assistance. But the $5 would be going into a account that would be specifically to lower our national deficit. I know that this is a problem that our government go us into by being involved in 2 wars and providing assistance to other countries at the same time. Although we say that this is a problem that our government got us into, but I would rather start paying for that now than have our children suffer the worst of it when they are grown up. What's your take on that ?

    • mattforte profile image

      Steven Pearson 5 years ago from Spanaway, WA

      @Joelipoo - Yes I know I am - but some people are still implying a flat tax is unfair to the rich - and that just irks me ;-)

    • Joelipoo profile image
      Author

      Joelipoo 5 years ago from Ohio

      @Mac - I hate to be so negative, but there is no point paying towards the national debt when the politicians are only adding to it. Maybe once they decide to quit handing out money to everyone, we can make an effort to pay it off.

      @matt - The flat tax is the most fair thing across the board, so who knows what people are thinking(or not thinking).

    • Mac31 profile image

      Mac31 5 years ago from United States

      @Joelipoo - I completely understand that the politicians are the one's that put us in the situation that we are in today, but I still think that helping in anyway possible to save our kids from suffering in the long run. The only problem that I have with my idea is that there are going to be politicians that are going to find a way to funnel that money into there own pockets.

    • Joelipoo profile image
      Author

      Joelipoo 5 years ago from Ohio

      @Mac - I would also love to prevent anything from getting worse, but like you said, corrupt politicians will probably just pocket the money.

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