Thursday, September 09, 2004

The flat tax proposal

A recent editorial from the Contra Costa Times, a relatively conservative paper, discussed a flat tax proposal and national sales tax, both of which Bush is reported to be considering. According to the editorial, these measures would shift the tax burden signficantly from the wealthy to the middle-class in our society. Bush accuses Kerry of wanting to raise our taxes because he wants to roll back the tax cuts for the wealthiest two percent of our country; on the other hand a flat tax or replacing income tax with sales tax as Bush is considering would significantly shift the tax burden from the very rich to the middle class and working poor. A welfare society for the rich.


The twin attractions of a flat-tax are simplicity and apparent fairness. Unfortunately, under virtually every flat-tax proposal, the price of simplicity is higher taxes for most middle-income families and individuals, while upper-income taxpayers pay less, sometimes a lot less.

Now the top few percent of income-earners pay the lion's share of the tax burden. With the current graduated income tax those in higher incomes pay considerably higher tax rates that generally far offset any tax deductions or 'loopholes' they take advantage of.

Under flat-tax proposals, the tax burden would be shifted to middle-income taxpayers.

To compound the fallacy of a simpler and fairer flat tax, a senior Bush officials also said the president would consider replacing the income tax with a national sales tax. If there is a worse idea than the flat tax, it is a national sales tax.

To replace income tax revenues, a national sales tax would have to be exorbitant, perhaps in the 35 percent-plus range.

It also would place a heavier burden on middle-income families who spend a larger proportion of their incomes on taxable goods than do wealthy wage earners...


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