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The Pros And Cons Of Flat Tax

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Should we tax the rich more? There is an ongoing debate in the USA and across the world about how big the tax contribution of the wealthy should be and whether it should be increased. The nonpartisan Tax Foundation found GOP candidates are proposing anywhere from $2 trillion to $12 trillion in tax cuts over the next decade. How they do that is up for debate. Both Republicans and Democrats favor tax cuts in some instances. Republicans favor across-the-board tax cuts, both for individuals of all income levels and for corporate interests. Democrats favor tax cuts for lower and middle-income families, but believe taxes should be raised on wealthy individuals and corporations. In many cases, Democrats favor temporary exceptions for businesses that …show more content…

On the same note there are real world examples of flat tax successes. A common misconception made by Republican candidates is that if we cut taxes and spend, the economy will prosper or vis-à-vis. To demonstrate the radical change post 1920, government spending had decreased over 50%, taxes had dropped from a staggering 77% to a minute 25%, and lastly unemployment had dropped to its lowest rate in peacetime history to 1.8%. In flat-tax countries, taxpayers in the highest brackets move from consumption or tax-sheltered investments to more productive, taxable investments. Indeed, the Brussels-based Center for a New Europe notes that none of the countries that have adopted the flat tax are seriously contemplating any retreat from it. Since the tax's inception in 1994, Estonia has had an average growth of 5.2% a year, and now also ranks fourth (out of 155 countries) in the Index of Economic Freedom, published by The Wall Street Journal and the Heritage Foundation. After being mired in stagnation for years, in 2001 Russia implemented a flat tax of 13% for individuals, along with a 15% rate for most business income. The economy grew 7.3% last year, thanks in part to underground activity going legitimate, more than doubling revenues from income taxes. Even the New York Times, which opposes a flat tax in the U.S., has praised, President Vladimir Putin for "radically simplifying the code and slashing rates." On a trip to flat-tax Slovakia earlier this year, President Bush extolled those who are using the flat tax "to attract capital and create economic

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The middle class is working harder than ever, but yet they are not getting anywhere. The top 1 percent should stop saving and they are not generating enough for the economy, we need spending in order for the economy to run smoothly. A stable economy is a strong middle class and I totally agree with Robert Reich because the middle class actually spends their money! 70% consumer spending is from the middle class according to Reich. They are actually benefiting the economy and unlike the top 1 all they do is save.

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Wealthy people today bribe politicians in order to reduce their taxes and this is referenced in a quote by Warren Buffett, “These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us.” Buffett claims that an investor that earn billions per day can get a bargain of fifteen percent of tax interest, which is much less than the thirty three to forty one percent interest for the middle class. Similarly, some of the Gilded Age’s policies benefit the wealthy. For instance, because of the exploitation,workers united and striked against the cruelty. However, employers appealed for court orders against unions because the federal government denied unions recognition as legally protected organization.

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The Democrats believe there should be only cuts for middle and low-income families, but believe they should be taxed at a higher rate on corporations and wealthy individuals. The Republicans believe there should be tax cuts for everyone, both corporations and people of all income levels. “The Republicans passed the Bankruptcy Bill favoring credit card businesses over Americans whose budgets are destroyed by job loss or medical bills” (Freeman 329). In their turn, the Democrats have passed the Welfare Reform Act, cutting benefits for the poorest layers of the American population.

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The creation of the federal corporate income tax occurred in 1909, when the uniform rate was 1% for all business income above $5,000. [3] Since then the rate has increased to as high as 52.8% in 1969, and the single rate has become eight different rates for different income levels. [3] Today's rate for companies with over $18.3 million in income (the top category) is 35%. [3] Throughout US corporate tax history, Americans have debated whether or not lowering the rate results in job creation. Proponents of lowering the corporate tax rate to create jobs argue that it incentivizes job creation in the United States instead of overseas, encourages increased investment in research and infrastructure, and passes savings on to consumers through lower

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In our current tax system, our government and politicians give out tax favors to large corporations. While forcing the working middle-class man and small businesses to pay. In order to fix this issue of corrupt government tax favors, a single flat tax

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Here’s the deal, the government is debating whether federal income tax rates in American should be raised or not. Raising federal income tax rates in America generates resources rapidly, offsets cost of lower families, and creates a savings income. Raising tax reduction on the American people will contribute towards

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The article says, “While the top 1 percent have seen their incomes rise 18 percent over the past decade, those in the middle have actually seen their incomes fall.” (Stiglitz 2011) While the rich are getting higher incomes prices the poor are getting higher income by taking it from the one in the middle which therefore, makes them get a lower income percentage. America has fallen behind because of not being an equal country to the population by the income equality there is a huge gap between the income being earned by the poor and the rich. The rich are wealthy and the poor depend on the government for everything. As stated in the article, “America lags behind any country in the old, ossified Europe that President George W. Bush used to deride.

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The infamous debate of taxes stems from one unruly question: should the wealthy pay a greater percentage of taxes than middle and lower income people? Current tax laws are considered a progressive tax structure. This means the more you make, the percentage of taxes progressively increases. According to Forbes, “The top rate will fall from 39.6% to 37%. The bottom rate remains at 10%, but it covers twice the amount of income compared to the previous brackets” (Forbes).

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In Taiwan, the taxing standard is based on the annual revenue. Every person who gets slavery needs to pay 20% of the income for income tax. A millionaire who earns $10,000,000 a year need to pay $2,000,000 for the income tax while a blue-collar worker who earns $600,000 per year only needs to be taxed $120,000. This taxing standard is equal to both rich and poor people. Therefore, tax on rich more is necessary and it will make the country

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Many people are strongly debating whether or not the rich should pay higher taxes. I believe it should be that the rich do pay higher taxes. When times in the economy are rough, the government needs to look consider at how they could bring in more money. Charging the wealthy higher taxes could be a strategy the government could use., and the wealthy people are the ones who could afford it.

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