GOP Candidates Covet A Flat Tax.
Tax reform is a popular feature of GOP presidential campaigns, and this isn't the first time that presidential candidate has touted the one-size-fits-all approach. Not all Republicans agree that leveling the tax system that much is the best idea, but some of the top-ranked GOP hopefuls are making a good showing in the polls, and the topic is likely to get plenty of lip-service Tuesday night during the Fox Business debate.
What Is AAaAaAeAeAaAeAeA Flat
The point of a flat tax is, simply, simplicity. Instead of a system that taxes varied levels of incomeAaAaAeAeAaAeAeA differently, as the current Amer system does, under a flat tax system, everyone is taxed at the same rate. The current, tiered system of taxation imposes higher taxes on income above certain benchmarksAaAaAeAeAaAeAeA and tops out at 39.6 percent of in above $413,201 (http://www.forbes.com/sites/kellyphillipserb/2014/10/30/irs-announces-2015-tax-brackets-standard-deduction-amounts-and-more/) for individual taxpayers in 2015.
Instead, aAaAaAeAeAaAeAeA flat tax means that everyone pays the same tax rate. instance, Texas Sen. Ted Cruz's (https://www.tedcruz.org/tax_plan_summary/) plan calls for a 10 percent rate. That means that whether you make $40,000 or $4.5 million a year, you only have to hand over 10 percent of your income. Businesses under Cruz's plan would have a flat tax of 16 percent, which would, (http://www.bloomberg.com/politics/trackers/2015-11-03/ted-talk-cruz-explains-his-simple-flat-tax-plan) according to Cruz , make sure that giant corporations that are currently paying very little would have to cough up some dough.
Joining Cruz is Texas Sen. Rand Paul, who (https://www.randpaul.com/issue/taxes) wants a 14.5 percent flat tax, Dr. Ben Carson, who (http://www.reuters.com/article/2015/11/09/us-usa-election-carson-taxes-idUSKCN0SY22S20151109) wants a 15 percent flat tax, and former Pennsylvania Sen. Rick Santorum, who (http://www.forbes.com/sites/peterjreilly/2015/10/15/santorum-2020-flat-tax-might-be-hard-on-many-small-businesses/) wants a 20 percent flat tax rate.
What About Deductions?
Most of the plans from 2016 candidates include ending some or all tax deductions currently available. For example, Carson would do away with all deductions. Others, like Cruz, Santorum and Paul, make exceptions for things like home mortgages and charitable giving deductions since, in their view, charities and churches tend to provide better services than governments.
What About Payroll Taxes?
Cruz and Paul want to get rid of payroll taxes, which go toward things like social security retirement benefits and Medicare. To continue paying for these services, the candidates say that the flat tax rate on corporations will offset the costs by eliminating instances in which corporations pay very little or no taxes through deductions or tax breaks.
Aside From Simplicity, What's The Point Of This Tax System?
Republicans argue that implementing these flat tax rates, which are also basically big tax breaks for people in the upper echelons of the income spectrum, promote growth. The idea here is that, with more money in the pocket, higher income folks will be more likely to invest in new businesses and ventures. That, in turn, would mean more productivity, more jobs and a growing economy.
That Sounds Great, Why Don't Some People Like It?
"Flat tax" doesn't always mean "tax break" (http://www.nytimes.com/2011/11/06/business/flat-tax-doesnt-solve-inequality-problem.html) for lower-income families . Some families and individuals, through deductions based upon their particular situations, may pay much less in taxes than they would under a flat tax system. That means, if true, that those with the lowest incomes would end up paying more while wealthy people would see their tax rate plummet.
Aside from the potential immediate impacts on low income tax payers, the flat tax can also exacerbate income and wealth income inequality, critics
|Printer friendly Cite/link Email Feedback|
|Publication:||International Business Times - US ed.|
|Date:||Nov 11, 2015|
|Previous Article:||Bernie Sanders Wants To Open Cable-Box Market.|
|Next Article:||Bedouins Push Back Against ISIS In Egypt.|