TAXES
A flat tax: Now that would be class warfare
I have no love for the current tax system, and in fact would benefit from a flat tax, but I don't think people arguing for flat taxes realize they actually significantly benefit the rich, hurt the middle class and absolutely punish the poor unless the poor are subsidized.
There is just no way 155 million workers earning less than an average of $55,000 (I believe it is more like $45,000 to $50,000) while subsidizing the poor can be taxed at an average of 15 percent -- which is the IRS average for anyone under $75,000 -- and still take in the $1.25 trillion in income tax that the IRS takes in today.
As for the rich? On average, they pay roughly a 29 percent income tax today, again according to the IRS, so their tax burden would basically halve unless the middle class were to see an increase. Russia's implementation of a flat tax system (at 13 percent, which is not feasible here without further budget cuts) has been a boon to the rich and a curse to the poor.
ALEX SCHNARR, BROOKLYN CENTER
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Wouldn't it be wonderful to use the KISS design method (keep it simple, stupid)?
With a tax system using value-added tax and/or straightforward income tax rates without all the deductions, exemptions and credits, we could have transparency, fairness, consistency and predictability (good for taxpayers, investors and governments). This would also save money on tax preparation and compliance.
But how to go from our complicated system to this new world without major adverse economic impacts or material changes in tax revenue collections?