Flat-taxers pretend a flat tax is good public policy, for two reasons. First, they say, it would simplify paying taxes. Baloney. Flat-tax proposals don’t eliminate popular deductions. Second, they say a flat tax is fairer than the current system. The truth is the current tax code treats everyone the same.
The real problem is the top brackets are set too low relative to where the money is. The top-most bracket starts at $375,000 a year. People with incomes higher than that pay 35 percent – again, only on that portion of their incomes exceeding $375,000. This is absurd. It means a professional who’s making, say, $380,000 a year pays the same income-tax rate as a plutocrat pulling in $2 billion or $20 billion.
Actually, it’s worse than that because the plutocrats get most of their income in the form of capital gains, which are taxed at only 15 percent. That’s why America’s 400 richest people – who earned an average of $300 million last year, and who have more wealth than the bottom 150 million Americans put together – now pay at a 17 percent rate (according to the IRS).
Regressives are pushing the flat tax as a smokescreen.
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