2 ms·
Why is a "genuinely progressive" tax system always considered inherently more fair? I get the basic argument supporting it. But the reality is that a progress
by Travis 16y ago
Why is a "genuinely progressive" tax system always considered inherently more fair? I get the basic argument supporting it. But the reality is that a progressive system introduces additional complexity to the codes. And that complexity allows those with means or time to find the loopholes, reducing their effective tax rates. The Warren Buffet income tax anecdote is particularly relevant here.
It seems to me that setting a flat tax rate that is set to equal the expected federal budget would work to effectively solve the swirling issues. Top tier rates would go down, but the majority of the superrich would see their effective rates go up. Fewer loopholes, more direct correlation between the federal budget and your tax sheet. Better transparency. Simpler returns (seriously -- think about how much time/money people would save by not needing tax accountants!)
There would be some unintended side effects, like the accountants as mentioned above. But overall, i would think the net gain would be huge. Of course, it will never happen -- the vested interests love their complex tax system, because they can exploit it. And they love complaining about tax rates as a red herring, to distract from the fact that very few people in the top income rates pay a high rate. http://freakonomics.blogs.nytimes.com/2008/05/01/taxes-warren-buffett-and-paying-my-fair-share/ http://freakonomics.blogs.nytimes.com/2008/05/01/taxes-warre...