Debate Club

Secret of the Flat Tax: Middle Class Pays More So Rich Pay Less

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With Herman Cain soaring to the top of the Republican pack on the basis of his 9-9-9 plan, a flat tax is once again at the center of public debate. Texas Gov. Rick Perry, and some days Mitt Romney, are always spouting the virtues of a tax system that is "simpler, flatter, and fairer."

While simplicity is generally desirable in a tax code, it has nothing to do with the tax code being flat. And being flat would be the opposite of being fair, unless people think it is unfair that they don't pay more taxes.

[Vote: Do the Rich Pay Enough in Taxes?]

Confusing a simple tax code with a flat tax is a cheap political stunt. The number of tax brackets doesn't affect simplicity at all. Regardless of the number of brackets, there is only one calculation needed. The instruction is simple. It looks like this: "pay $1,000, plus 15 percent of income above $50,000." You can have a flat tax or 100 tax brackets, it is the same formula. Even a Republican presidential candidate can figure it out.

The other part of the story is that the flat tax means a large tax cut for rich people. Every economist who has examined flat tax proposals over the years comes to that same conclusion: A flat tax means the rich pay less.

And if the rich pay less and we raise the same amount of money, then someone else has to pay more. And the someone in this story is the middle class. It really is that simple.

The flat taxers like to run around with Lake Wobegone economics where we are all going to pay less and still have the same amount of money, but the world doesn't work that way. We have tried reducing taxes to raise revenue. People remember Reagan's tax cuts and the large deficits they led to. They remember Bush's tax cuts and the large deficits they led to.

No one is going to fall for this trick yet again. When we cut taxes on the rich, we get less money and the rest of us will have to make up the shortfall.

For middle-class people, a flat tax means that they will have to pay more taxes. If people think it would be fairer that they pay higher taxes, then the Republican Party has the presidential candidates for you.

Dean Baker

About Dean Baker Author of 'The End of Loser Liberalism: Making Markets Progressive'

Tags
federal taxes

Other Arguments

#1
120 Pts
Current Tax Code Is Confusing
#2
59 Pts
Flat Tax Unites Americans

Yes – Flat Tax Unites Americans

Grover Norquist President of Americans for Tax Reform

#3
52 Pts
Flat Tax Unleashes Economic Growth

Yes – Flat Tax Unleashes Economic Growth

Rick Perry Texas Governor and Presidential Candidate

#4
26 Pts
Flat Tax Would Eliminate 'Crony Capitalism'

Yes – Flat Tax Would Eliminate 'Crony Capitalism'

Mary Kate Cary Former White House Speechwriter for President George H.W. Bush

#5
1 Pts
Cutting Taxes for the Rich Never Ends Well

No – Cutting Taxes for the Rich Never Ends Well

John Irons Research and Policy Director at the Economic Policy Institute

#7
-32 Pts
Flat Tax Will Benefit Only the Rich

No – Flat Tax Will Benefit Only the Rich

Steve Wamhoff Legislative Director of Citizens for Tax Justice

#8
-37 Pts
Flat Tax Would Introduce New Problems

No – Flat Tax Would Introduce New Problems

Kelly Phillips Erb Author of Taxgirl Blog at Forbes.com

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