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How would a flat tax rate avoid the unfortunate reality of burdening the poor with relatively high taxes? Tax brackets, in theory, mitigate this by reducing or
by cbcoutinho 9y ago
How would a flat tax rate avoid the unfortunate reality of burdening the poor with relatively high taxes? Tax brackets, in theory, mitigate this by reducing or eliminating taxes for low income individuals and families. A flat tax rate would surely simplify things, but I'm not convinced it would be the best solution.
- mrob 9y agoA flat tax (eg. land tax + sales taxes, which are harder to manipulate than income tax) can be used to fund a universal basic income, which automatically gives you a smooth progressive tax system with no weird breakpoints setting up inefficient incentives.
- cbcoutinho 9y agoI was under the impression that by flat tax you meant flat income tax. Property taxes are, at least in California, a very local form of taxes that finance local school districts. Using property taxes for something else (ie, to provide UBI for anyone not living in the direct school district) would be a large change in how those funds are distributed.
- mrob 9y agoThe exact mechanism of taxation is an implementation detail. All that's need to qualify as "flat" is that the tax paid must be in fixed proportion to the property or activity being taxed. The only reason I suggested other taxes is because precisely defining "income" in such a way that taxpayers can't manipulate it to their advantage is difficult.
- naravara 9y agoOh so all we need to do is eliminate the principle of Federalism and govern the entire country as one large state then?
- tici_88 9y agoThere could be a basic minimum income level that is tax free. This would be very similar to what we have right now. For example, income under around 9,000 (or was it 10,000?) in Canada is not taxed federally.
- djrogers 9y agoThat’s true in the US as well, although the number changes depending on marital and dependent status (from $9,500 to $21,300).