Ancient History, Etc.
The Flat Tax has been exposed by numerous folks indeed. The flat tax is loved by many conservatives and even some libertarians. It’s supported by Rick Perry, Herman Cain (as popularized with his 999 plan), former House majority leader Dick Armey, etc. Armey is the chairman of the Freedom Works group. It’s the Tea Party funded Koch Brothers supported group. Perry and Cantor yell against the stimulus, but use money from the stimulus to fund their projects in a form of hypocrisy. The flat tax raises taxes on the poor and lowers them on the rich. The non-partisan Tax Policy Center estimates that Cain's plan (the only one out there so far) would lower the after-tax incomes of poor households (incomes below $30,000) by 16 to 20 percent, while increasing the incomes of wealthier households (incomes above $200,000) by 5 to 22 percent, on average. Under Cain's plan, fully 95 percent of households with more than $1 million in income would get an average tax cut of $487,300. And capital gains (a major source of income for the very rich) would be tax free. Usually, the flat tax plans lead into the rich benefiting. The current tax code is slightly progressive since the rich pay a slightly higher rate. Yet, the poor pay a larger share of their incomes in payroll taxes, sales taxes, and property taxes. Flat taxes don’t eliminate popular deductions. A flat tax means a professional whose making, say, $380,000 a year pays the same income-tax rate as a plutocrat pulling in $2 billion or $20 billion. Our current flat tax at the top is treating the nation's professional class exactly the same as it treats super-rich plutocrats. The top 1 percent is now raking in over 20 percent of the nation's total income and owns over 35 percent of the nation's wealth. Simple fairness requires three things: More tax brackets at the top, higher rates in each bracket, and the treatment of all sources of income (capital gains included) exactly the same. Also, people on minimum wage in many cases can’t afford many basic necessities of life (I’m not even talking about health insurance).