Incomes up for upper class and rich, down for middle class...

[mrstickball]

sethnintendo said:

Rath said:
I don't understand the support for flat taxes in America, it would really screw the poor.

Well, it would only screw the poor if they weren't compensated for the necessities like food.  Basically, I like it because it is better than the government taking money out of my paycheck automatically and making me wait till the end of the year to get it back.  It would only screw the poor over who can't control their spending.  Don't want to pay tax on anything that isn't a necessity then don't buy it. 

For what its worth, I've never seen a proponent offer a flat tax plan that didn't include some sort of prebate system that had a simple exemption based on if the person filed separately or jointly. i.e. the first $15,000 of a single person's income or $30,000 of joint income was tax-free. After that number, the tax kicked in.

So a single person making $30,000 under such a system at, say, a 20% flat tax would have to pay $3,000 (20% of $15,000) while a family making $100,000 would have to pay $14,000 (20% of $70,000).

The attraction of a flat tax is that, outside of the poverty exemption, there are no loopholes. No millionaire will pay less than 19.9% of his income in taxes, without exception (assuming a 20% flat tax).

The atrocity of the American tax system is that corruption thrives in complexity. The higher the taxes and the more loopholes that exist, the more incentive there is for people to do what they can to reduce their burden. Its called the Laffer Curve effect. When you have a tax code that is 20,000 pages or so and has exemptions for everything, you can get away with a lot.