[GCFL-discuss] Flat Tax

[gcfl-discuss at gcfl.net]

Hi Dave, good to see we don't instantly agree on everything. I'm looking
forward to what Jeff might suggest.

The idea of a flat tax is that $1500 to someone who makes $10,000 is
exactly the same sacrifice as $150,000 to a millionaire.

The idea of a graduated income tax is, that the first statement just
ain't so.

If your income barely covers food, clothing and shelter, then taking 15%
of it cuts to the bone. If your income allows you to build a mansion as
your primary residence, two summer homes, a winter getaway, and a couple
of condominiums on tropical islands, then $150,000 just cuts down on the
number of diamond necklaces and exotic racing cars you can afford this
year.

We could resolve this dilemma be exempting a really large amount, like
$50,000 from tax, and putting a flat tax on the rest. Some people say
that is unfair because a minority of the people would pay almost all the
taxes, and the majority would pay none at all, and have no sense of
responsibility.

So, maybe we could exempt the first $10,000, put a 1% tax on income from
$10,000 to $50,000, and the main flat tax on all other income, maybe 20%.
But already its no longer a flat tax, but a graduated income tax.

When the income tax was first passed at the federal level, it only
applied to about 10% of the population, and the tax return was one page.
Over the years, it grew in every direction. Something simple would be a
good idea, but I still favor putting heavier burdens on those who are
really wealthy. I never heard of anyone passing up a chance to make a
million dollars because they would only get to spend $500,000 of it.
Actually, forty years ago, the top federal tax bracket was 70% -- I don't
remember what the income level it applied to was.

Siarlys


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