Like many Americans my husband and I have worked very hard to come to a point where we are earning a living wage. We are now paying a large percentage of our income in federal income tax. I propose that ALL Americans are taxed a flat rate of 10% at the most. This would eliminate much of the fraud that occurs as write offs would be a thing of the past. No longer would our government pay out huge refunds to Americans who didn’t pay their fair share of taxes. Eliminating these outlandish refunds and (sometimes) fraudulent write offs would save so much money that the lower tax rate would not negatively affect our country. A flat tax rate would also mean no more guesswork on the part of employers and tax payers. This would reduce spending in IRS personnel as well.
Flat tax works best if it is paired with a Universal Basic income. This offsets the cost to the poorest citizens while barely being a dent for the more prosperous. It would also replace other government programs such as Snap and welfare.
I see where you are coming from but I think that takes us into socialist territory. Maybe it would be possible to only tax those above the poverty line but the large child tax credits would be eliminated.
So I 100% agree that implementing. UBI would eliminate the child tax credit. It should also eliminate every other public assistance program out there. Milton Friedman, who was a brilliant economist did a very good model of how by enacting a flat tax at the same time instituting a UBI and eliminating other public assistance programs makes people both more responsible for their own welfare AND cuts government spending by leaps and bounds.
The basic math equation goes somewhere along the lines of a (Hypothetical) UbI of $50k per person per year regardless of income level. At the same time implementing the (hypothetical) flat tax of 20% across the board for individuals and corporations with ZERO tax shelters, itemized deductions, etc. 20% just on individuals making $100K a year or more, plus’s the millions (or billions) generated from businesses no longer having tax shelters, cuts or deductions would more than pay for the UBI for the lower-income families and individuals who would also still be paying the same flat tax. It would also eliminate the stupid income restrictions on welfare that persuade welfare recipients to not seek employment for fear of losing their benefits. Because people who would otherwise not seek work are now in the employment pool and earning a wage in addition to the UBI contributes more to the tax pool and economy at large. The exact amount of both the UBI and the flat tax is of course debatable and could be subject to change with each session of Congress doing fine tuning to find the sweet spot.
Having a UBI for each person with a Social Security number encourages the birth of children regardless of socioeconomic class, which is key in a country with a declining population. ( we could lower the amount of UBI allowed for children below the working age so that it does not turn into a millionaire making business).
The real beauty of this is that it allows for Stay at home parents, resulting in fewer child care expenses (which are currently subsidized) which in turn reduces childhood contagious diseases that simultaneously reduces health care costs, reduces grocery bills because it will trickle down into more home-prepared healthy meals, enables better educational outcomes especially for at risk populations because one-on-one interactions with a parent increases cognitive aptitude at a young age, etc.
I’m in total agreement with a flat tax for all. I’m not in favor of UBI’s.
Can you provide the Thomas Sowell reference? As far as UBI - it has a negative connotation, and I would prefer a small tweak - when a child is issued a SSN they should have a Personal Investment Account set up in their name with a small monthly deposit from the Federal Government. The funds would need to be invested in an Index Fund, and should grow tax free. Those funds would eventually be allowed to be used like an FSA for medical expenses, education funds, and eventually would become part of their retirement portfolio. If the owner of the Personal Investment Account dies, the funds may be used for burial expenses, and any remaining funds could be re-allocated to living relatives tax-free if deposited into their Personal Investment Account, otherwise the money would be taxed at a flat rate. All the accountants who may be out of work due to a revised tax structure may choose to become Administrators of the Personal Investment Accounts and receive a small commission to do so. That way there is transparency and accountability.
I am actually quite sorry, I revised my post because the idea is from Milton Friedman, not Thomas Sowell. I must have not finished my coffee that morning to type the wrong name!
Here are a couple of links.
The “Heavy” article does not acknowledge the flat tax portion of his idea, but does outline the UBI portion very well. The second link is pretty dense reading, but is the better at explaining the full idea.
Thank you, Fred Walker
Thanks, in my opinion these ideas lack the most necessary step. That is Repeal of Amendment 16. Any taxation change without Repeal of Amendment 16 can be changed by any incoming Administration. Before 1913 and Amendment 16 government tried several forms of (Direct Taxation) these attempts were found to be unconstitutional by the Courts and were struck down. By the Repeal of Amendment 16 Direct Taxation like Income and Property Taxation would become illegal. That is my reasoning for my Amendment. Much like the Repeal of Amendment 18 by Amendment 21. My Amendment Proposal would do the same for ending Direct Taxation. I assume it would become Amendment 28. I hope this better explains my position. Have a Blessed Day, Fred Walker