I used to be a staunch supporter of a flat tax but am not so sure anymore. I recently did my taxes and realized that i could deduct my casualty loss from Hurricane Gustav. Allstate wouldn't pay a dime because of a super high deductible, so i was stuck with thousands of dollars of an appraised loss. It was nice to have at least that and recoup somewhat. So maybe a flexible tax system that compensates for misfortune, rewards certain endeavors (such as pursuing more education) etc.., is better than the hard stoic flat tax. I now tend to believe that our current system is a noble endeavor that shouldn't be abandoned for imperfections.
The whole point of a "flat" tax is to only pay a "fair" tax rate. You will not always have those deductions. Anyone who believes our current tax system is "noble endeavor that shouldn't be abandoned for imperfections" is being foolish.
The solution would seem to lie somewhere in between--a "flatter" tax but with fewer loopholes, credits, deductions, depreciations, etc.
Of course i'm for everyone paying as little taxes as possible. But we do have a collective tax bill due, and the system should have credits & deductions for appropriate and just reasons. It's a kind of insurance in that our risk is spreak out, albeit a last resort at dilution of risk. Our values are reflected in our tax code and that's a good thing. Of course, loopholes and abuse are a problem.
I'm torn on this issue. Tax simplification is necessary, but a flat tax will remove a powerful tool Congress has to sway the population. A credit here a deduction there a new tax for this and people can b e persuaded into doing things that are beneficial to all of us.
flat tax can't work unfortunately. just like fair tax and no tax. Doesn't work. Progressive tax is not bad depending on the levels imo.
Actually I responded to the wrong post, I meant to respond to the one above it. :redface: A perfectly flat tax probably is not workable, but a flatter tax is. Some amount of progressive taxing will always be needed, but the loopholes and complexity must be reduced and simplified or the benefits will be nullified by evasion.
But the reverse is also true. A credit and a cut here and there can also result in uncompensated-for income losses that hurt all of us.
