Reply #13: well flat tax idea precludes any exemptions or special deductions [View All]

[whistle]

...that's the idea behind the same tax rate for everyone. It is regressive however, because we all know that lower income people are hit hardest because they are not in the same position as wealthier people to give up one fifth of everything they make. In fact, pulling a number of 20% out of the air doesn't just happen by accident. The lowest tax rate I believe is 10% for single people with taxable income of under $3,000 and it isn't until one has taxable income in excess of $65,000 that the tax rate for single filers hits 20%

<link> http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

That means that people with normal deductibles, own a home, pay interest on a mortgage, etc. probably make $85,000 in gross income before they hit a tax rate that is 20% and that is 80% of the tax payers. Thus, they are hit immediately with the heaviest burden. But, the wealthy who make more than those levels find ways to shelter much of their income and so they rarely pay over the 20% even now. So the flat tax is very regressive and for that reason could never be sustained. It would create two economic classes in the country as well, which is also unsustainable.