Does any one know about the flat tax idea and what it entails?
Answer:
A flat tax (short for flat rate tax or proportional tax) taxes all household income, and possibly corporates profits as well, at the same marginal rate. A flat tax usually refers to the taxation of incomes but can be applied to consumption.
Flat taxes are uncommon in advanced economies, whose nationwide taxes typically include a graduated tax on household incomes and corporate profits, such that the marginal tax rate rises as the income or profit of the taxed entity rises. Flat taxes, implemented as well as proposed, exempt from tax household income below a statutorily determined level that is a function of the type and size of the household. As a result, a flat marginal rate is entirely consistent with a progressive average tax rate. Otherwise, all income or consumption is taxed at the same marginal rate.
A flat tax is one where every tax-payer pays the same percentage of their income in taxes. For example, if the tax rate were 15%, people who make $7,000 a year would have a 15% tax rate, as would people who make $7 million a year.
The flat tax is simply a standard percentage charged on income earned. There would be no tax credits or write offs.
Proponents of the flat tax state that this would simplify income tax and overall be less of a tax burden to the majority of taxpayers because it would more evenly distribute tax burden across all incomes and in addition there would be less government employees needed to audit taxes.
Former Governor of California Jerry Brown proposed this in the early 90's when he was in the Democratic presidential primaries. I believe he said at the time the percentage would be 13% on income across the board.
flat tax (short for flat rate tax or proportional tax) taxes all household income, and possibly corporates profits as well, at the same marginal rate. A flat tax usually refers to the taxation of incomes but can be applied to consumption.
Flat taxes are uncommon in advanced economies, whose nationwide taxes typically include a graduated tax on household incomes and corporate profits, such that the marginal tax rate rises as the income or profit of the taxed entity rises. Flat taxes, implemented as well as proposed, exempt from tax household income below a statutorily determined level that is a function of the type and size of the household. As a result, a flat marginal rate is entirely consistent with a progressive average tax rate. Otherwise, all income or consumption is taxed at the same marginal rate.
hope this helps a bit. basically a flat tax is for consumables
An income tax having a single rate for all taxpayers regardless of income level and type.
When Dick Army of Texas was in Congress, he proposed this.
The first $30,000.00 of income would be exempt from tax for everyone alike.
At the same time, no other deductions would apply for anyone.
A tax rate to be determined would apply to every dollar of income above 30K. I don't recall that a rate was determined or if it would be on a sliding scale.
The real estate industry went bananas. They claimed that homes would not sell if the morgtage interest could not be deducted.
I ask anybody, how many people pay 30K per year in morgtage interest, or for that matter, how many people have that much in total deductions including all exemptions?
The proposal never got to the plate, let alone first base.
Under the plan, businesses would be permitted to deduct all legitimate operating expenses but not all the so called "entertainment" deductions.
Multi millionaires would fall under the same rules.
The paper work would be nil, since only the first 30K would be deducted and the rate computed on all else.
Does anyone think that Congress would pass this? And be included?
The flat tax ID is to increase the taxes for the poor and middle class, and lower taxes for the wealthy, so that everyone pays exactly the same tax rate.
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