# Why wouldn't a flat income tax work? **URL:** \ **Category:** Great Debates\ **Created:** [May 26, 2011, 7:39pm UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343 "2011-05-26T19:39:05Z")\ **Posts on this page:** 7\ **Page:** 7
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [February 12, 2020, 11:30pm UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/122 "2020-02-12T23:30:01Z")
> [@bump](#): > > I think the answer is that they’re both- the percentages are flat- EVERYONE pays X% of the price of the goods they bought. > > But that’s also regressive, in that if someone making 100k a year buys $50 worth of taxable groceries here in Dallas, and some person making minimum wage also does, that $4.13 makes a LOT bigger deal to them than it does to me. That’s not the only reason it’s regressive. It’s also because certain income brackets spend a higher proportion of their income in a way that exposes it to sales taxes. Let’s just say for example, I make $120K a year. I put $19K in my 401K ( no sales tax), pay$14K for my half of the rent or mortgage ( no sales tax) and put another $10K in savings. Let’s say I also contribute $6K a year toward my health insurance premium - that’s $49K I’m not paying sales taxes on right there. I’m only paying sales taxes on at most 71K worth of income. Even some of that is going to be on non-taxable groceries and other items, but lets say I’m paying 5% sales tax on that $71K so I pay $3550. But that’s only 2.95% of my actual income. Someone who actually earns $71K and has the same rent and health insurance payments as me but no savings or investments will pay $2550 on that $51K - which is less than I paid in dollars, but it’s 3.5% of the total income of $71K ---
**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:** [February 13, 2020, 12:30am UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/123 "2020-02-13T00:30:22Z")
> [@bump](#): > > I think the answer is that they’re both- the percentages are flat- EVERYONE pays X% of the price of the goods they bought. > > But that’s also regressive, in that if someone making 100k a year buys $50 worth of taxable groceries here in Dallas, and some person making minimum wage also does, that $4.13 makes a LOT bigger deal to them than it does to me. > > One way of looking at it in terms of why it’s regressive is that the $4.13 is worth something like 40 minutes of work for a minimum wage person, while for that 100k salaried person, it’s around 5 minutes and 15 seconds. A truly flat tax would be flat in terms of utility, but I think hours worked might be easier and just as fair. If sales tax were charged this way (kind of tough to do, but still) I think it would address **doreen** ’s objection. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [February 13, 2020, 3:53pm UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/124 "2020-02-13T15:53:58Z")
> [@doreen](#): > > That’s not the only reason it’s regressive. It’s also because certain income brackets spend a higher proportion of their income in a way that exposes it to sales taxes. Let’s just say for example, I make $120K a year. I put $19K in my 401K ( no sales tax), pay$14K for my half of the rent or mortgage ( no sales tax) and put another $10K in savings. Let’s say I also contribute $6K a year toward my health insurance premium - that’s $49K I’m not paying sales taxes on right there. I’m only paying sales taxes on at most 71K worth of income. Even some of that is going to be on non-taxable groceries and other items, but lets say I’m paying 5% sales tax on that $71K so I pay $3550. But that’s only 2.95% of my actual income. Someone who actually earns $71K and has the same rent and health insurance payments as me but no savings or investments will pay $2550 on that $51K - which is less than I paid in dollars, but it’s 3.5% of the total income of $71K Sales tax is another one of those ostensibly equal, but regressive in reality sorts of taxes, in that in theory, everyone’s paying sales taxes at the same rate on what is purchased. So the 100k guy pays 8.25% (around here) per dollar for his box of saltines, and so does that minimum wage guy. But it falls down for the same reasons as a flat tax, which is that same marginal utility reason mentioned upthread, which is that $1 to the minimum wage guy is a much larger proportion of his income than $1 is to someone making 100k. Part of the problem here is that because we have multiple independent taxing authorities, it’s rare that total tax burden is considered, and sales tax is definitely part of that, although one that’s rarely thought about. Personally, I’d be for expanding the list of items in each state that are sales tax exempt, and raising the sales tax (maybe even going for a VAT) on the rest. I mean, anything necessary ought to be sales tax free, not just absolute necessities like food. It’s absurd to me that feminine hygiene products are taxable, for example. But at the same time, I’m not entirely sure why sales taxes should NOT be equal on luxury items like soda. Why should I pay more for a soda than a minimum wage person? ---
**Author:** ![DrCube](https://avatars.discourse-cdn.com/v4/letter/d/a3d4f5/32.png) [@DrCube](https://boards.straightdope.com/u/DrCube)\ **Post date:** [February 13, 2020, 5:29pm UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/125 "2020-02-13T17:29:29Z")
Why should sales taxes exist at all? ---
**Author:** ![Omar\_Little](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/omar_little/32/269_2.png) [@Omar\_Little](https://boards.straightdope.com/u/Omar_Little)\ **Post date:** [February 13, 2020, 10:28pm UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/126 "2020-02-13T22:28:05Z")
Based on the logic stated in this thread, grocery prices are regressive. Your cell phone bill is regressive. Just because it’s regressive doesn’t mean it should be changed. ---
**Author:** ![doreen](https://avatars.discourse-cdn.com/v4/letter/d/858c86/32.png) [@doreen](https://boards.straightdope.com/u/doreen)\ **Post date:** [February 14, 2020, 12:10am UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/127 "2020-02-14T00:10:27Z")
> [@Omar\_Little](#): > > Based on the logic stated in this thread, grocery prices are regressive. Your cell phone bill is regressive. Just because it’s regressive doesn’t mean it should be changed. “Regressive” and “progressive” refer to taxes, not cell phone bills and grocery prices. A regressive tax is one where the rate decreases as the income increases , a progressive tax is where the rate increases as the income increases and a flat ( or “proportional”) tax is one where everyone pays the same rate regardless of income. You could in theory have a flat sales tax, just as long as you don’t mind A) imposing that sales tax on literally every purchase, including food ,clothing, medicine and real estate and B) deferring taxes on the income of some very wealthy people for many generations - if someone has 50 billion dollars that wasn’t taxed when it was earned, how many generations will it take until it’s all spent? ---
**Author:** ![chargerrich](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chargerrich/32/5399_2.png) [@chargerrich](https://boards.straightdope.com/u/chargerrich)\ **Post date:** [February 21, 2020, 3:34pm UTC](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343/128 "2020-02-21T15:34:08Z")
I believe that a flat consumer tax would be the more “fair” option. If you make 24k per year, you bring home 2k per month and YOU can have some agency in how you are taxed. While the student and lower income families are purchasing basic necessities (taxed at say 27%), the NBA player would pay far more tax (at the same 27%) on his fleet of super cars, crates of Cristal, fancy home(s) and water pleasure vehicles 🙂 [Previous page](https://boards.straightdope.com/t/why-wouldnt-a-flat-income-tax-work/583343.md?page=6)