- Posted September 29, 2012 by
This iReport is part of an assignment:
Final presidential debate: Unanswered questions
Does A Flat Tax Rate Make The Most Sense?
Instead of squabbling over which loopholes to close and which classes to distribute incentives and deductions to, do either of the candidates think it may be more fair and equitable to have flat tax on all except the very lowest incomes?
Just to throw some tax rate thoughts out there for the purpose of discussion:
Poverty Threshold and Below: 0%
Up to Three Times Poverty Threshold: 10%
Everyone Else: 15%
Deductions, Incentives, Subsidies: 0%
*current poverty line is $11,170 for single person household, $15,130 for 2 person, $19,090 for 3 person
Cost of living varies greatly between rural and urban areas, but if you're living at or below current poverty thresholds, it's a bit harsh to expect revenues to come from that particular group. Not only would living on less than $1600 gross per month already be tough for a family of three, but they since they already qualify for certain low-income programs it wouldn't make any sense to tax them.
I think most people can agree that they rely upon federally funded programs to some degree as part of our quality of life here in the US, and that we all have an obligation to contribute to the many federally funded resources we consume or benefit from including the federal highway system, defense, SS/Medicare, education, FDA, FAA, etc. It's not free to maintain the programs you rely upon everytime you take a road trip, board a flight, retire, or send your kids to public school.
I personally feel that it is NOT fair for any individual or business entity to pay absolutely nothing in taxes as a result of various subsidies and deductions. How is it justified for people or businesses to make substantial income and pay nothing? Whether you are a farmer, an oil company, a family or a small business owner, I call that serious market interference. I can't see how either side of the aisle can dispute that those highly lobbied breaks and incentives can be called by any other name.
Of course I'm not an economist, but would love to hear the candidates' opinions about how revenues would be affected if there was more of a flat tax system. Common sense leads me to believe that it would help to greatly reduce spending by reducing the cost related to processing and auditing complex returns, and that having (almost) everyone pay into the system would have a net increase for revenues.