# A flat tax is a non-starter, stop suggesting it **URL:** \ **Category:** Great Debates\ **Created:** [May 23, 2012, 2:47pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834 "2012-05-23T14:47:18Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [May 23, 2012, 5:15pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/21 "2012-05-23T17:15:58Z")
> [@steronz](#): > > My standard response is to point out that it’d be impossible to pay for our current government without setting the flat tax rate so high as to completely hose most Americans. There are ways around this, like giving people tax allowances. For example, you might give everyone an allowance equal to the national minimum wage. So you only pay your flat tax on the excess. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [May 23, 2012, 5:34pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/22 "2012-05-23T17:34:12Z")
> [@Little\_Nemo](#): > > Because in a debate about what tax system works best, you should stick to debating tax systems. > > There’s also a worthy debate on the issue of how much government spending should be, but that’s a separate topic. I think they are related because it is certainly a different discussion if we tax Americans at 10% as opposed to 40%, the only difference being how much revenue the government needs to meet its spending. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [May 23, 2012, 5:40pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/23 "2012-05-23T17:40:27Z")
> [@steronz](#): > > Over in one of those libertarian threads, an example was given of the sorts of things real-life libertarians like to talk about - a flat tax. I agree with this, as it’s something I hear a lot in real-life conversations, not just from capital L libertarians, but even wishy-washy not-very-political libertarians who are all over the spectrum on various issues. > > My standard response is to point out that it’d be impossible to pay for our current government without setting the flat tax rate so high as to completely hose most Americans. I think I see a flaw in your reasoning. Using the current progressive tax system, it’s impossible to pay for our current government. That’s why the projected federal deficit for this year is $1.3 trillion. So if we use your logic, it should be unacceptable to talk about the current tax system. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [May 23, 2012, 5:51pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/24 "2012-05-23T17:51:27Z")
> [@Lobohan](#): > > Our taxation system should be the same. 10% of income to someone who is at the poverty line is very, very painful. But 10% to someone who makes $20 million a year is trivial. He won’t even feel the loss of the money. So the rate should be low for the poor and high for the rich. > > Of course the specific break-points can be argued, but the flat-taxers simply don’t understand that they are advocating distributing the pain preferentially to the poor. Or perhaps they do, and they simply want to hurt the poor while elevating the rich. Consider the current tax system for a moment. Liberals often complain, for instance, that [Warren Buffett pays a lower tax rate than his secretary](http://abcnews.go.com/blogs/business/2012/01/warren-buffett-and-his-secretary-talk-taxes/). If there were a flat tax, Warren Buffett would pay the same tax rate as his secretary. If there were a flat tax with a fixed exemption, Warren Buffett would pay a higher tax rate than his secretary. This would be particularly true if the flat tax rate applied to dividends and capital gains as well as garden-variety income. Furthermore, the current tax system is designed with endless loopholes that allow the rich and privileged members of society to escape from paying taxes at all. The system is designed so that loopholes can be written for particular industries, or for particular professions, or for people in certain states and counties. Some tax loopholes are designed around the needs of a certain individual. A flat tax would wipe out all these special privileges for the rich. Lastly, when the tax code is nine million words long, it obviously helps to have a professional accountant who can help you hide money from the IRS. Right now the rich can afford such accountants, but the poor cannot. With a flat tax, there wouldn’t be any advantage to hiring professional accountants because there wouldn’t be so much complexity for them to exploit. So in short, there are potential advantages to the poor in a flat tax system. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 23, 2012, 5:57pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/25 "2012-05-23T17:57:19Z")
> [@Ludovic](#): > > There is also their hypothesis that the poor are mainly poor because they don’t work very hard… Who is this “their” that you are talking about? I’m sure you can find a few nuts who might think this, but there is nothing in Libertarian philosophy that would back it up. Now, if you want to talk about low skills and what work society values at what price, I think we have something to talk about. ---
**Author:** ![Lobohan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobohan/32/79_2.png) [@Lobohan](https://boards.straightdope.com/u/Lobohan)\ **Post date:** [May 23, 2012, 5:58pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/26 "2012-05-23T17:58:30Z")
> [@ITR\_champion](#): > > Consider the current tax system for a moment. Liberals often complain, for instance, that [Warren Buffett pays a lower tax rate than his secretary](http://abcnews.go.com/blogs/business/2012/01/warren-buffett-and-his-secretary-talk-taxes/). If there were a flat tax, Warren Buffett would pay the same tax rate as his secretary. If there were a flat tax with a fixed exemption, Warren Buffett would pay a higher tax rate than his secretary. This would be particularly true if the flat tax rate applied to dividends and capital gains as well as garden-variety income. That’s an example of where Norquist and the right-wing media have overcome common sense. The argument is framed such that a billionaire paying\* the same amount\* would be seen as a win. > [@](#): > > Furthermore, the current tax system is designed with endless loopholes that allow the rich and privileged members of society to escape from paying taxes at all. The system is designed so that loopholes can be written for particular industries, or for particular professions, or for people in certain states and counties. Some tax loopholes are designed around the needs of a certain individual. A flat tax would wipe out all these special privileges for the rich. Unless loopholes are put into it. The correct answer, of course, is to reduce the amount of loopholes in our current system. Not switch to a system that massively reduces the burden on the rich from the get-go. > [@](#): > > Lastly, when the tax code is nine million words long, it obviously helps to have a professional accountant who can help you hide money from the IRS. Right now the rich can afford such accountants, but the poor cannot. With a flat tax, there wouldn’t be any advantage to hiring professional accountants because there wouldn’t be so much complexity for them to exploit. A progressive system isn’t inherently complex. The tax cut-outs are the result of wealthy people manipulating the congress. > [@](#): > > So in short, there are potential advantages to the poor in a flat tax system. But not more advantages than fixing the problems in our current system. ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [May 23, 2012, 6:03pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/27 "2012-05-23T18:03:43Z")
> [@ITR\_champion](#): > > I think I see a flaw in your reasoning. Using the current progressive tax system, it’s impossible to pay for our current government. That’s why the projected federal deficit for this year is $1.3 trillion. So if we use your logic, it should be unacceptable to talk about the current tax system. I don’t buy the flaw. It isn’t that a progressive tax system can’t pay for the current government, it’s that one party refuses to allow it to do so. A progressive tax system paid for the government during the Clinton years. It could do so again if the rates went back to normal levels. One can easily twiddle a progressive system to pull in enough revenue, but doing so with a flat tax is much harder. The flat tax is a cure in search of a disease. There is nothing inherently morally superior about a flat tax. ---
**Author:** ![Ravenman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ravenman/32/2929_2.png) [@Ravenman](https://boards.straightdope.com/u/Ravenman)\ **Post date:** [May 23, 2012, 6:12pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/28 "2012-05-23T18:12:38Z")
> [@BobLibDem](#): > > There is nothing inherently morally superior about a flat tax. Well, a revenue-neutral flat tax would make most middle class people pay more in taxes and let most of the wealthy pay substantially less. There are some people who would say that is an “inherent moral superiority” to the current system. ---
**Author:** ![PrettyVacant](https://avatars.discourse-cdn.com/v4/letter/p/49beb7/32.png) [@PrettyVacant](https://boards.straightdope.com/u/PrettyVacant)\ **Post date:** [May 23, 2012, 6:19pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/29 "2012-05-23T18:19:12Z")
Yep, a real vote winner this.; everyone pays the same as the guy up on the hill in the mansion. two words: eleven trillion. ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [May 23, 2012, 6:30pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/30 "2012-05-23T18:30:06Z")
> [@PrettyVacant](#): > > Yep, a real vote winner this.; everyone pays the same as the guy up on the hill in the mansion. > > two words: eleven trillion. The trouble is, a lot of middle class schmucks want to be that guy up on the hill in the mansion, and they think somehow that keeping taxes low on the wealthy will help them get there. ---
**Author:** ![MandaJo](https://avatars.discourse-cdn.com/v4/letter/m/ac91a4/32.png) [@MandaJo](https://boards.straightdope.com/u/MandaJo)\ **Post date:** [May 23, 2012, 6:55pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/31 "2012-05-23T18:55:35Z")
> [@ITR\_champion](#): > > Lastly, when the tax code is nine million words long, it obviously helps to have a professional accountant who can help you hide money from the IRS. Right now the rich can afford such accountants, but the poor cannot. With a flat tax, there wouldn’t be any advantage to hiring professional accountants because there wouldn’t be so much complexity for them to exploit. This has nothing to do with flat vs progressive. A flat tax would be a flat rate applied to some amount of taxable income. 8,999,000 of those words are defining what “taxable income” means, and presumably would still apply. The other 1000 pretty much come down to a definition of brackets. Cutting those out wouldn’t change much. You could vastly simplify the tax code while keeping brackets and you could could keep the complex tax code while implementing a flat tax. They are independent concepts. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [May 23, 2012, 7:05pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/32 "2012-05-23T19:05:45Z")
> [@Saint\_Cad](#): > > I think they are related because it is certainly a different discussion if we tax Americans at 10% as opposed to 40%, the only difference being how much revenue the government needs to meet its spending. You creating a false dichotomy. We don’t face a choice between a progressive tax system with a four trillion dollar budget or a flat tax system with a two trillion dollar budget. Flat taxers just create that linkage because the apples-orange comparison makes their system look better and to convince budget hawks to ally with them. But there’s no reason we don’t have the options for a progressive tax system with a two trillion dollar budget or a flat tax system with a four trillion dollar budget. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [May 23, 2012, 7:13pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/33 "2012-05-23T19:13:58Z")
> [@John\_Mace](#): > > No. Many Libertarians favor open borders. But you can’t make that work with the current social safety net. It makes no sense to assert that the system, as a whole, can’t be taken into account when talking about pieces of the system. Unless you simply want to shut out certain ideas altogether. Pretty much what I said in my previous post. I agree there’s a link between the issues of immigration and social services. But there’s no equivalent link between a flat tax and a decrease in government spending. You can have one without the other. (Personally, I’m in favor of decreased government spending and against a flat tax system.) ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 23, 2012, 7:30pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/34 "2012-05-23T19:30:53Z")
> [@Little\_Nemo](#): > > Pretty much what I said in my previous post. I agree there’s a link between the issues of immigration and social services. But there’s no equivalent link between a flat tax and a decrease in government spending. You can have one without the other. (Personally, I’m in favor of decreased government spending and against a flat tax system.) Yes there is, because when everyone is paying the same rate, you can’t get a bunch of people voting to increase spending by raising the taxes on some other group. Now, you still have the issue of those who pay no tax at all, but it’s less of an issue than when you allow things like a “millionaire tax”. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [May 23, 2012, 7:37pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/35 "2012-05-23T19:37:43Z")
> [@Lobohan](#): > > That’s an example of where Norquist and the right-wing media have overcome common sense. The argument is framed such that a billionaire paying\* the same amount\* would be seen as a win. If a billionaire currently pays a lower rate than his secretary, wouldn’t you favor a change that makes the billionarie pay the same rate or slightly more? > [@](#): > > Unless loopholes are put into it. The correct answer, of course, is to reduce the amount of loopholes in our current system. **steronz** ’s OP makes clear that this thread is not about discussiong the Platonic ideal of tax systems, but rather about disucssing whether a certain tax system is feasible. It would be nice if we could snap our fingers and make all the loopholes go away, but it’s not feasible. Neither major party has any interest in simply giving up its ability to reward interest groups and donors with tax loopholes. So if the flat tax is not feasible, the loophole-free tax system isn’t feasible either. > [@BobLibDem](#): > > I don’t buy the flaw. It isn’t that a progressive tax system can’t pay for the current government, it’s that one party refuses to allow it to do so. But I was not comparing a flat tax scheme to the broad category of progressive taxation schemes. I was comparing a flat tax scheme to the particular federal tax scheme that we have at the moment. Neither one is capable of paying for the federal government at its current size. If we shouldn’t talk about a flat tax scheme due to that scheme’s inability to cover the current size of the federal government, then we also shouldn’t talk about the tax scheme we already have for the same reason. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [May 23, 2012, 7:44pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/36 "2012-05-23T19:44:10Z")
> [@Saint\_Cad](#): > > The issues I have with statements like this is that it is based on a Keynesian assumption that the economy will tank if the government does not prop it up as a matter of economic policy and not as Eccles, Keynes and Reagan believed as a policy during financial crisis. Bush2 was the one who kept low taxes and deficits during a recovery. But the collapse would come from radically changing government, not from lack of stimulus. The government employs lots of people - a massive cut to the federal budget means that those people would be suddenly out of work. This at the state level is already holding back the recovery. > [@](#): > > Also, why do we need the social safety nets that are built into the system? Because if we don’t have them people will suffer and maybe die. But this nicely illustrates that support for a flat tax is not about equity, it is about starving the beast. > [@](#): > > Social security was financially flawed from the beginning but rather than making it self-supportive it continues to be a pyramid scheme. The military is severly overbudgeted as we have seen in most circumstances a smaller force with overwheming superior logistics can serve the US’s needs as long as we avoid the clusterfuck of Bush2/Obama’s Iraq2/Afghanistan. I’ll ignored the typical bullshit about Social Security. The military is a bit large now, given that Obama has gotten us out of Iraq. Note that the Republicans are screaming about the cuts previously agreed to. We shouldn’t have gone into Iraq in the first place, but given that we did it is pretty well agreed that the problem was not too many troops but too few, since Rummy agreed with your military strategy. > [@](#): > > And why is it a tiny fraction as written in the OP? I estimated 30-40% tax rate but I see a 23% taxrate with no exemptions. I am middle class and pay an effective rate of 14% so let’s say we need to make do with half of the personal income tax (and the OP did not address supplementing this with increased corporate tax). Now the budget is 50% of what if we ignore the effect of deficit spending which apparently is not a concern to Keynsians. Or Republicans when they are in office. Saying no exemptions, deductions, or loopholes is easy - implementing it is a bit harder. Why not get rid of the loopholes now? We might raise some revenue, but we could also cut rates across the board if necessary to keep the middle class from getting a big increase. Since the rich use loopholes more, it would make the system more progressive. After we implement that, we can think about the flat tax. But I wouldn’t hold my breath, since every one of these loopholes has a lobby for it. They didn’t get put into the tax code by elves. If we get rid of the loopholes **ITR champion** ’s fantasy about getting rid of the accountants will come true - any idiot can compute taxes flat or progressive. If we don’t do it this way the sequence of events is pretty obvious. They’d pass the flat tax and appoint a committee to get rid of the loopholes. The committee will fail, revenues will not be neutral but will crash, and the government haters will be happy. ---
**Author:** ![steronz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steronz/32/11765_2.png) [@steronz](https://boards.straightdope.com/u/steronz)\ **Post date:** [May 23, 2012, 7:51pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/37 "2012-05-23T19:51:12Z")
> [@ITR\_champion](#): > > **steronz** ’s OP makes clear that this thread is not about discussiong the Platonic ideal of tax systems, but rather about disucssing whether a certain tax system is feasible. It would be nice if we could snap our fingers and make all the loopholes go away, but it’s not feasible. Neither major party has any interest in simply giving up its ability to reward interest groups and donors with tax loopholes. So if the flat tax is not feasible, the loophole-free tax system isn’t feasible either. I’d agree with this. “Close all the loopholes” is just as fantastical as “just make the government smaller and a flat tax will work.” Both are non-starters. We can talk about closing specific loopholes, but it’s going to take decades of work and political will to move to a loophole-free system. I’m not holding my breath. > [@ITR\_champion](#): > > But I was not comparing a flat tax scheme to the broad category of progressive taxation schemes. I was comparing a flat tax scheme to the particular federal tax scheme that we have at the moment. Neither one is capable of paying for the federal government at its current size. If we shouldn’t talk about a flat tax scheme due to that scheme’s inability to cover the current size of the federal government, then we also shouldn’t talk about the tax scheme we already have for the same reason. Meh. If anyone honestly suggested that nothing was wrong with our current tax code and we should just maintain the status quo, deficit and all, I suppose you’d have a point. I don’t think anyone is suggesting that, though. Our current tax system has been proven to work in the past, albeit with higher rates, if we define “work” as a balanced budget. Therefore, a progressive tax system, with marginal rates which are sufficiently high, is feasible. A flat tax is not. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [May 23, 2012, 7:52pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/38 "2012-05-23T19:52:18Z")
> [@John\_Mace](#): > > Yes there is, because when everyone is paying the same rate, you can’t get a bunch of people voting to increase spending by raising the taxes on some other group. Now, you still have the issue of those who pay no tax at all, but it’s less of an issue than when you allow things like a “millionaire tax”. I don’t feel you’ve established a causative link there. Maybe a correlation at best. ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [May 23, 2012, 8:41pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/39 "2012-05-23T20:41:41Z")
> [@ITR\_champion](#): > > So in short, there are potential advantages to the poor in a flat tax system. Every advantage you mention can also be found in a progressive tax system. That is, the problems are not a function of complex income tax rates, they are complexities in calculating your taxable income. The progressivity of the tax rate is the single easiest part of calculating your taxes, and the simplest text of the tax code. You find your taxable income, go to the chart, and there’s your tax bill. You could have a system with 20 separate tax rates and it still wouldn’t take more than 1 page of law to describe. Going to one tax rate fixes the most trivial “complexity” of the tax code. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [May 23, 2012, 10:44pm UTC](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834/40 "2012-05-23T22:44:32Z")
> [@Cheesesteak](#): > > Every advantage you mention can also be found in a progressive tax system. That is, the problems are not a function of complex income tax rates, they are complexities in calculating your taxable income. Exactly (and Manda Jo made the same point). You could write down a simple flat tax system in one line. And you could write down a simple progressive tax system in one paragraph. The complexities come from the volumes of special exceptions that get added on to these simple systems. If you really want to simplify the tax code, work on eliminating these exceptions. [Previous page](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834.md?page=1) [Next page](https://boards.straightdope.com/t/a-flat-tax-is-a-non-starter-stop-suggesting-it/622834.md?page=3)