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That is a common misconception. Flat taxes don't shift the tax burden from the very wealthy to the not-so-wealthy, as they generally include a tax free amount o

That is a common misconception. Flat taxes don't shift the tax burden from the very wealthy to the not-so-wealthy, as they generally include a tax free amount of income. That leads to hidden progression, so to speak. Also, the poorer you are, the less likely you are to be able to hire a tax advisor, so you cannot use all hidden loopholes etc. So a flat tax would actually mostly benefit the not-so-wealthy.

gjm11 17y ago
The so-called FairTax proposed by some US politicians does in fact shift the tax burden, from the very wealthy and the very not-wealthy to the moderately-well-off. FactCheck, who are generally pretty reliable, have some analysis at http://www.factcheck.org/taxes/unspinning_the_fairtax.html http://www.factcheck.org/taxes/unspinning_the_fairtax.html and their second graph (the first one is from the US Treasury Department and is potentially misleading in a way described on that page) divides up incomes at $15k, $24k, $42k, $75k (I'm sure there's a reason for those divisions; are they where current tax rates change or something?) and seems to show the <$15k and >$75k brackets gaining substantially, the $24k-$75k brackets losing out, and not much difference for the $12k-$24k bracket. Later statements there suggest that the actual range in which people will pay more is something like $24k-$200k. So, it appears that at least one prominent proposal for a "flat tax" shifts the tax burden from the very wealthy and the poor to the middle classes. (I'm guessing that in absolute terms the great majority of the benefit goes to the very wealthy, though quite possibly the poor would feel it more.)
- dsplittgerber 17y ago
  My previous idea of a flat tax (over here in Europe) referred only to a flat taxation of income. The "fairtax" proposal you link refers to a flat taxation of sales; also there are payroll and income taxes in the US. What I don't understand: What's the difference between a flat taxation on sales vs income and, also, what's the difference between a payroll tax vs income tax?

gjm11 17y ago

The so-called FairTax proposed by some US politicians does in fact shift the tax burden, from the very wealthy and the very not-wealthy to the moderately-well-off. FactCheck, who are generally pretty reliable, have some analysis at http://www.factcheck.org/taxes/unspinning_the_fairtax.html http://www.factcheck.org/taxes/unspinning_the_fairtax.html and their second graph (the first one is from the US Treasury Department and is potentially misleading in a way described on that page) divides up incomes at $15k, $24k, $42k, $75k (I'm sure there's a reason for those divisions; are they where current tax rates change or something?) and seems to show the <$15k and >$75k brackets gaining substantially, the $24k-$75k brackets losing out, and not much difference for the $12k-$24k bracket. Later statements there suggest that the actual range in which people will pay more is something like $24k-$200k. So, it appears that at least one prominent proposal for a "flat tax" shifts the tax burden from the very wealthy and the poor to the middle classes. (I'm guessing that in absolute terms the great majority of the benefit goes to the very wealthy, though quite possibly the poor would feel it more.)

dsplittgerber 17y ago
My previous idea of a flat tax (over here in Europe) referred only to a flat taxation of income. The "fairtax" proposal you link refers to a flat taxation of sales; also there are payroll and income taxes in the US. What I don't understand: What's the difference between a flat taxation on sales vs income and, also, what's the difference between a payroll tax vs income tax?