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Pros And Cons Of Flat Tax

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The Pros and Cons of a Flat Tax

Wouldn 't it be great if filing your taxes would take only a few minutes? This may seem like a farfetched dream, but it could actually become a reality through the implementation of a flat tax. This is a tax system that applies the same tax rate to everyone regardless of their income. There are also no deductions or exemptions allowed. Supporters of this idea believe that it is a better system than the progressive tax system currently in place, where taxpayers are taxed according to their income bracket. But how is it more beneficial? And won 't it carry any negative effects on the economy and government revenue? Go through the advantages and disadvantages of a flat tax rate to gather supporting data before you decide on your stand.

List of The Pros of a Flat Tax

1. It makes …show more content…

4. It can help the economy grow. Advocates of the flat tax rate believe that people can be encouraged to work harder to earn more because they won 't be afraid of a larger tax penalty for a bigger income. In addition, more business will be more willing to invest. This can result to more stable economic growth and higher overall tax revenue.

List of Cons of a Flat Tax

1. It favors the wealthy.

Those who are earning bigger income can enjoy paying less tax, so they end up with more money, further widening the gap between the wealthy and poor.

2. It makes the poor even poorer.

In line with the point above, those in the lower class will be burdened even more, especially since there will be no more exemptions and deductions. This results in having less money to spend for necessities and paying debts, making their financial situation even worse.

3. It can shut down the IRS.

The internal revenue may be some people 's mortal enemy, but remember that a lot of people depend on their IRS jobs to make a living. Implementing a flat tax makes the taxation system simple and takes away the function of the bureau, ridding its employees of

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