The U.S. should implement a flat tax rate ASAP. It would make people of each income level pay their fair share, simplify taxation, spur economic growth, and provide additional incentive to work more.

In 2003, the top 1% of tax payers in the U.S. paid 34% of the collections from the IRS. The top 50% paid 96% of the collections for 2003! How is this fair. 1% of the country should not pay 33 times their fair share of the taxes, right? A flat tax would make this more fair! Since the rate is the same a richer person would pay an equal percentage of his income. None of this "ability to pay" stuff which greatly increases a high-income groups percentage of collection. If I make 50 times more money than you I will pay 50 times as much tax – how much fairer could I get? Also, people with many lobbyists and lawyers would not be able to get tax exemptions. This brings us to the next point, simplicity.

Many site discuss the simplicity of a flat tax. It would likely need only a postcard-sized piece of paper where you say how much you earned, multiply that by the tax rate and there is your owed tax!

A flat tax rate has helped many former communistic nations develop quickly. Real GDP growth in russia went from 1.1 -> 4.7. -11.3 -> 3.8 in latvia, and -8 -> 4.3 in estonia! We would see similar growth in the U.S. after implementation (maybe not as much of a jump, though).

The reason for this growth is likely the added incentive to do extra work. Previously if one fell into a tax bracket with a base of $100,000 one might pay a 25% tax rate (the numbers are random). If one made $150,000 and was still in the $100,000 tax group you would pay also pay money on the extra $50,000 you are from the base line in the tax group. This rate is the marginal tax rate. This rate could be much higher than the 25% rate. So you could pay $25,000 in taxes for the $100,000, but then if you marginal rate was 35% you would pay an additional $17,500 in taxes. In total you have payed $42,500 in taxes! Almost a third of your income. With a flat tax rate at 25% you would only pay $37,500 in taxes. But what is important is how much the additional $50,000 gets taxed. In both cases you pay $25,000 for the $100,000 (lets say you are a professor and get that as your salary). You then teach at a camp in the summer where you earn the $50,000. With a flat tax you pay $12,500 in taxes rather than $17,500. So, with a flat tax the marginal rate is the same as the base rate meaning that if you work more you are not taxed more. A high marginal tax rate really removes incentive to work hard. In the 1940's, marginal rates were as high as 94%! Would you work for and extra $50,000 if you could only keep $3,000 of it?

These links have good tax info on them:
http://www.heritage.org/Research/Taxes/bg1866.cfm
http://www.heritage.org/Research/Taxes/bg1765.cfm

Woops, guys I made a small mistake in the first paragraph up there about how much taxes people are paying. Replace it with this:

In 2003, the top 1% of tax payers in the U.S. (based on income) paid 34% of the collections from the IRS, while making 16% of the income. How is this fair. The top 1% should not pay twice their amount in taxes, right? If they make 16% of the income, they should pay 16% of the taxes, not 34%. The bottom 50% of the country (also based on income) made 14% of the income in 2003. They should therefore have paid 14% of the taxes while the top 50% should pay the other 86% of the taxes. Currently the bottom 50% pay 3% of the taxes and the top 50% pay 97% of them. This is obviously wrong and unfair! A flat tax would fix this. Since the rate is the same a richer person would pay an equal percentage of his income. None of this "ability to pay" stuff which greatly increases a high-income groups percentage of collection. If I make 50 times more money than you I will pay 50 times as much tax – how much fairer could I get? Also, people with many lobbyists and lawyers would not be able to get tax exemptions. This brings us to the next point, simplicity.

The Problem I have with a "flat tax" is it doesn't address the other problems. The same people that pay taxes now will still be the ones that pay after the flat tax in in place.

I prefer a "national sales tax" and eliminate all other taxes. This would do a couple of things. We could eliminate the IRS or at least cut it back to just a small accounting office. They would no longer have to worry about where I get my money. They no longer have to snoop around looking at my financial transactions.

Everyone has to shop and buy things so everyone would be paying into the system, taking the burden off the middle class. The mafia would be buying things. The illegal aliens have to shop. The rich and poor. even visitors from other countries would be helping out when they come here and shop.

One last benefit would be it would encourage people to save money and consume less. The less you shop the less taxes you pay.

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Voltaire: “Anyone who has the power to make you believe absurdities has the power to make you commit injustices.”

I'd actually like to see them try this. It sounds good on paper.

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"Man lives in the sunlit world of that which he believes to be reality. But unseen by most is an underworld, a place that is just as real... but not as brightly lit... A DARK SIDE!"
-opening from Tales From the Darkside

Oh it would work and it would work real good. In fact the federal Government would get more money then they ever dreamed of and no one would feel the pain. Having said that though it will never happen in a million years. The problem is the Big corporations run this country and anything that would encourage people not to spend money isn't going to see the light of day. They want people spending like drunk sailors on leave each and every day.

Also the way it is now the government collects vast amount of data on people and their spending habits under the premise of fighting terrorism when in reality most of the data they collect goes straight to the giant corporations to make sure no one gets in a position to give them any competition. They want to know these things so they can ruin you well before you get into position to give them a run for their money. Also the government likes programs that control people so they can pull the puppet strings when they need to.

__________________
Voltaire: “Anyone who has the power to make you believe absurdities has the power to make you commit injustices.”

Flat taxes are the best. The rich have a tax-rate which is so low, at least with a flat tax they would sharing the burden not escaping it.

A national sales tax is good when a country needs to get out of debt. In Canada when we had massive debts in the early 90s, we implimented a national sales tax and now we are paying off more debt than any other G8 country and producing massive surpluses. Now that we are doing well, the national sales tax is being gradually lowered to spur additional economic growth.

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"The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself. " — John Stuart Mill

Sounds like we need it in the US then!

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"Man lives in the sunlit world of that which he believes to be reality. But unseen by most is an underworld, a place that is just as real... but not as brightly lit... A DARK SIDE!"
-opening from Tales From the Darkside

Wow, did you read the original post? The rich are paying more than their fair share, so where are you getting this "escape" bull sh*t?

I think the first post was about the tax rates in the U.S. and he is in Canada and was talking about the tax rates in Canada. At least thats the way I read it.

__________________
Voltaire: “Anyone who has the power to make you believe absurdities has the power to make you commit injustices.”

Did Canada do away with all other taxes when they put in the National sales tax or did they put that on top of all the other taxes?

__________________
Voltaire: “Anyone who has the power to make you believe absurdities has the power to make you commit injustices.”