http://www.nypost.com/seven/01182009/postopinion/opedcolumnists/the_word_is_flat_150734.htm
The article posted above promotes the use of flat tax and discusses how it could alleviate much of the economic problems US is facing right now. The article refers to the current tax system in the US as a "maze of confusing, complicated, counterproductive federal taxes" and recommends the flat tax, because it would motivate people to work harder. Also since the current tax system acts as a negative incentive and makes it harder to run businesses, it argues that the flat tax would be able to create an economic boom through the increased number of businesses and the jobs that come along with it. According to the article, the result would be one flat fair tax that would treat all businesses equally and banish all the other innumerous taxes such as the excise tax, inheritance tax, and import duty.
This article ties in with the economic concept of taxation and their battle for superiority. The USA currently runs a progressive tax system, a system in which the tax rate increases along with the amount of money made. The flat tax ,which is recommended in this article, on the other hand charges an equal rate for all amounts of money made. The pros of progressive taxes are that, it decreases poverty levels and seems more fair while the cons include the fact that it acts as a disincentive, and that, it is not constant. The pros of flat tax are that it acts as an incentive and reduces complications while the cons include higher poverty levels. Tax equity is important in order to meet everyone's needs, but yet, it is nearly impossible to achieve.
In my opinion, I think the implementation of the flat tax would not be a very good idea despite the fact that it could improve the current economic condition of the US. Such a system would be hard to initiate and would surely be met with rebellions. In addition, while the flat tax would act as an incentive to get people working harder, it would also make it less fair for the people with jobs that don't pay as much. Consequently, this would result in lower demand for these jobs and force their providers to increase their price or suffer in turn. While I am a firm believer of the fact that the US needs to reform their tax system in order to pull their economy back up, I just don't think that the flat tax is the way to go.
--Rafaat Mir--
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Taxes should be fair but the problem remains in defining what fairness means. I agree that US should keep the progressive tax system because even though someone with a higher income pays more in taxes than someone with a low income, the sacrifice that each has to make in paying taxes is thought to be the same. The reason some people seem to favour the flat tax system is because it is easy to understand and calculate whereas under the progressive system, it is more complicated due to marginal tax rates. Low income earners in a flat tax system will hold the bigger burden of paying the tax because of the loss in purchasing power that result from taking away their amount of one's income.
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