Is a Flat Tax a Good Idea?
Though by no means a new idea, the flat tax is resurging as a possible alternative to the current tax code as many of the 2012 Republican presidential candidates have included a version in their economic plans. A flat tax is a single rate that spans all income brackets of taxpayers, rather than the current “progressive” system, which taxes higher-income individuals at increased rates and includes numerous deductions and exemptions. Under Herman Cain’s so-called 9-9-9 plan, Americans would pay a flat 9 percent rate on their personal incomes, corporate incomes, and on sales. Meanwhile, Texas Gov. Rick Perry’s so-called Cut, Balance and Grow would give taxpayers the choice to opt out of the current system and pay 20 percent on individual income while allowing for a few of the deductions in the current code. Proponents of the flat tax argue that it would simplify the tax code while broadening the tax base. Opponents say the flat tax would shift much of the revenue burden to middle- and lower-income Americans while lowering taxes on the wealthiest. Here is Debate Club’s take on the flat tax:
The Arguments
No — Flat tax would cut taxes only for the rich, which never ends well
JOHN IRONS, Research and Policy Director at the Economic Policy Institute Comment (2)
Yes — The flat tax saves time, provides choice, and restores fairness to the tax code
MICHAEL C. BURGESS, U.S. Representative Comment (1)
Yes — Flat tax makes it more difficult for the government to divide Americans against each other
GROVER NORQUIST, President of Americans for Tax Reform Comment (1)
No — The middle class pays more so the rich can pay less
DEAN BAKER, Author of 'The End of Loser Liberalism: Making Markets Progressive' Comment (7)
Yes — The Cut, Balance and Grow plan will unleash economic growth
RICK PERRY, Texas Governor and Presidential Candidate Comment (4)
No — Flat tax will benefit only the richest taxpayers
STEVE WAMHOFF, Legislative Director of Citizens for Tax Justice Comment (1)
No — Flat tax shifts burden to low- and middle-income taxpayers
CHARLES B. RANGEL, U.S. Representative Comment (2)
Yes — Flat tax would spur foreign investment, job creation, and economic growth
MARY KATE CARY, Former White House Speechwriter for President George H.W. Bush Comment (2)
No — A flat tax doesn't solve our problems; it just introduces new ones
KELLY PHILLIPS ERB, Author of Taxgirl Blog at Forbes.com Comment (8)
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