It is said that there are only two things certain in life: death and taxes. This aphorism used to be but a playful jab at human societies’ financial foundation, but as of recent the foundation has eroded and death is more like the result of doing taxes. As the years have gone on, the U.S. Tax code has acquired more and more rules and regulations, and has slowly morphed into a mess so thick that there is a whole industry based around professionally paying taxes for others. It would be safe to say that paying one’s own taxes is a minefield. So why do we carry on as if there is no problem? Some propose the idea of a flat tax system, over our current progressive tax system. For the novice, a flat tax seems like a fairly reasonable idea. "Why not everyone just pay the same amount?". On the surface, yes, it would be a very equalizing factor. However, the intent of this idea would not have the impact that it needs to be truly helpful. Specifically speaking, if we all paid flat tax, it wouldn't be the same amount of money that everyone just sends to the IRS. At the end of the year, a taxpayer would calculate their taxable income after discerning their deductions, exemptions, and adjustments (these three terms are different categories of things like charity donations, job expenses, interest paid on loans/mortgages and what not) and be asked to pay a percentage of that figure to the government.
Plain and easy, yes? Well, when the numbers are crunched, plain and easy are two of the least accurate descriptors. Albeit the current tax code has numerous ways for a financially well off person to cheat out of paying taxes, the average taxpayer (who makes around $53,000) ends up only falling within the first bracket of the progressive tax system. They get taxed at 25% of their taxable income, instead of the total income, which is every single dollar that you claim to have made on your tax form. This results in a person sending an average check of $3,000 to $8,000 to the IRS. This seems like a pretty penny, but when compared with a flat tax, it looks like chump change. After calculating the cost of what an average taxpayer would pay in the flat tax, it ended up being a whopping $15,000! For the same amount of income as before! Under the flat tax, an average filer would be paying double thanks to the lack of exponentiality that the progressive system is based upon, as opposed to the linearity of the flat tax. Basically, in the progressive system, the less you have, the less you pay, and the more you have, etc. Allowing for a relative comfort where one has to not worry about owning a fat stack of their income to the government gives the average person a much easier time with living, rather than back-owing the government more than they can earn. Meanwhile, those who earn 10 to 20 times as much as them can rest easy knowing that their taxes are set to stay lower than they have ever been, especially compared to earlier historic tax rates. All in all, the flat tax is a bad idea. The best solution to the modern tax problem, is overhauling the tax code to be more cohesive.
