Thus, the flat tax is just a tax cut for the rich dressed up as a tax cut for the other classes.Īny income tax that shifts the burden onto those who are already over burdened with taxes and don’t have the ability to pay is generally not as fair as a system that accounts for differences in income and wealth. The only way to make a flat tax work is to cut spending, raise other taxes, or to increase the tax burden on the middle class (as unlike the lower classes, they still have some money to tax). This doesn’t make much sense considering lower-income Americans already pay a disproportionate share of their income in taxes (with all taxes considered) and extend themselves on credit and pay interest on debt (with many lower income families saving nothing or even going into debt each year). Those who pay nothing under the current progressive tax system would either pay the flat rate or be excluded based on income, while those who pay little under the current system would not be able to use deductions and credits to reduce their effective income tax burden (thus their rates would effectively go up if no other changes were made). In fact, the progressive tax brackets actually help those with lower incomes, because they can use credits and deductions to lower their marginal tax rate (AKA what income tax bracket they are in).Ī true flat tax (one that applied to everybody at a flat rate) would, considering the above, shift the tax burden from high earners to the lower and middle classes despite their inability to pay (in some cases). Under the current tax system about 1/2 of American families currently pay little to no federal income tax (as an “ effective tax rate“) due to deductions, credits, and the progressive bracket structure.įor the bottom 50% of earners it isn’t the income tax, but payroll taxes, excise taxes, sales taxes, and property taxes that comprise their tax burden. Feel free to skip around the page or comment with questions. The page is a little long, as we cover every point and possibility in detail, so let’s start by looking at the bottom line on a flat tax vs.

What is More Fair, a Flat Tax or Progressive Tax?Ī progressive tax (those who make more pay more) is generally “ more fair” than a flat tax (everyone pays the same rate).īelow we’ll look at a number of different aspects of the United States tax system to help explain why progressive taxes are generally more fair than flat taxes.

Is a flat tax regressive