Why America Should Adopt a Flat Tax System

Our society today has strived to become accustomed to our present tax system, but some just cannot come to terms with it. The current tax code is unfair to those who are single, work for under $50, 000 dollars per year, or have large families. The high tax percentages and low exemptions make it difficult for the average worker to prosper and get ahead in today’s world. The tax system also discourages citizens from saving and investing their earnings, ultimately pulling down the American economy. Over the past few years numerous proposals for a flat tax rate have surfaced and been reviewed. These proposals promise large tax cuts, fewer federal forms and costs, and larger exemptions (Armey 2). The United States should adopt a flat tax rate to better its citizens and increase the national economy.

Our nations current tax code is far too significant and complicated. Over 480 different tax forms exist for business professionals and individuals (Armey 2). The tax code also discourages workers from taking risks in the business world and crushes any entrepreneurial spirit. Many Americans have become frustrated with the high tax percentages and low exemptions as well. Tax percentages are some of the highest ever at an average rate of 39.6%. Only in 1981 when they reached 70 %, and during World War II at 94%, were American taxes any higher (Bartlett 2).

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Tax evasion has become a dilemma with our contemporary taxes. Several people will often claim less income on their tax forms, ending up not having to pay as much in taxes. The raising of exemptions, deductions, and write-offs have increased as well. The Internal Revenue Service has also reported problems with citizens inflating such figures as exemptions, write-offs, and contributions made to charity (Dent 4). Auditing of citizens has amplified over the past few years as well as a result of tax evasion.

During tax season many American lives are complicated and literally put on hold due to the stress and demand of taxes. Americans discover the tax code to be terribly confusing and frustrating, and often citizens become very stressed. Many turn to alternative solutions of tax configurations to take the load off of them, but come to realize that these services are rather expensive and sometimes inaccurate. Our country’s standard of living has also been decreased as a result of our nation’s taxes. Tax percentages are so elevated and exemptions are so minimal, it is virtually impossible for anyone to prosper and get ahead in our world today.

Double and triple taxation is also an issue with our current tax system. Numerous Americans do not save or invest their money for two core reasons: they do not have the money to invest, or they receive double and triple taxation off the money that they do decide to invest (Merski 2). Some have very little money remaining after their payday to invest and simply pass up on the offer of saving it. Others, on the contrary, will not invest because even though they receive interest off that saved money, they are later taxed on it. This outcome is a result of double and triple taxation and it is constantly annihilating the American economy.

Lastly, the current tax system discourages workers from venturing on business risks (Merski 1). Workers are frightened to undertake business risks because of the fallback that could possibly occur if the business went under. Furthermore, people who work vigorously and take risks automatically forfeit a greater portion of their money to taxes (Merski 1). In the long run, this results in the crushing of entrepreneurial spirits and work incentives which enevibitley spoils the economy.

With a flat tax rate system many advantages would occur for every American. Tax cuts would provide sustainable relief to everyone in every tax bracket. Actually, tax brackets would cease to exist. They would be eliminated with the flat tax. Citizens would only be taxed at a percentage based on their earnings, not what bracket of income they lie in. Not only would individuals benefit from this, but businesses would come to benefit as well.

Over the next ten years, federal income taxes would be reduced greatly. Individuals earning $37, 500 annually would see an overall tax cut of $721 million dollars. Those earning $47, 500 annually would witness an across the nation tax cut of $896 million dollars (Beach and Utt 2). Across the board relief would come to all citizens, targeting those particularly in the middle class. Plainly stated, someone who is earning ten times greater than his neighbor would be taxed ten times more. So, the more you earn, the more in taxes you will have to pay.

Another major benefit of the flat tax is the increased exemptions it delivers. A typical family of fours exemptions would intensify to right around $33, 800. At the moment the average family of fours exemptions is at about $17, 200 (Armey 6). A single person would be able to deduct $12, 200 from their earnings versus the current $7, 030. A married couple currently claims $12, 200, where as with the flat tax they would be able to claim $24, 400 (Armey 6). As you can imagine, everyone could benefit from the flat tax proposed exemptions.

The 480 odd tax forms that exist at the present time would be replaced with two post-card size forms: one for businesses and the other for individuals. This would render the filing of taxes to become much easier, and would also decrease the time devoted on refunding those excess taxes. A flat tax would reduce tax costs by approximately 94% (Gillespie 1). Several Internal Revenue Service occupations would be converted and would save the United States thousands of dollars every year.

Along with reduced tax percentages, elevated exemptions, and simpler forms, many aspects of taxes would be eliminated as well. A number of those aspects include death taxes, capital gains, IRA caps, marriage penalties, taxes on social security, and an intrusive Internal Revenue Service would all vanish. For taxpayers with capital gains and who utilize Roth IRAs to save for retirement, the tax reduction would be even greater than in the most up to date tax cut (Beach and Utt 2). Today’s economic loopholes, exemptions, and targeted breaks would cease to exist.

One disadvantage does occur, however, with a flat tax rate. Some Americans tax percentages would not decrease, but would increase if a flat tax ever passed. Those specifically affected by an enlarged tax percentage are those who are single and claim independent on their tax returns. Although, with the raising of exemptions, less income would cease to be taxed. This would result in a smaller quantity of money still being lost to taxes.

Every year Americans devote 5.4 billion hours to the complying of taxes (Armey 1). That is more time than it takes to construct every car, truck, and van produced in America every year. The cost of complying these taxes is estimated at $200 billion dollars annually. In other words, it costs $700 dollars to comply income taxes for every man, woman, and child in the United States (Armey 1). Collectively, more money is spent on taxes than on food, clothing, transportation, and housing combined (Armey 2).

In our world today over 86 countries have adopted and practice a flat tax rate (“Flat Taxes Circle the Globe” 2). Most industrial taxes and state taxes are at a flat rate as well. All in all, the United States has already had a grand deal of experience with the flat tax, but has not experienced it at the national level. One fourth of all states in America with income taxes have imposed a single flat rate, and most state corporate income taxes are consisted of single rate as well (“Experiencing the Flat Tax” 1). Other benefits associated with a flat tax rate are secured privacy, earning to one’s fullest potential, the eliminating of punitive taxation, and the promotion of an individual’s income and economic opportunities. Privacy would become secured because of less information being submitted for taxes. In addition, less Internal Revenue Service employees would be exposed to the tax forms and the information expressed on them. American citizens could earn to their fullest potential since tax cuts would be made and deductions would increase. Also, people would not be punished on their taxes. Double and triple taxation would become a thing of the past, and opportunities to better the economy would soar.

A national sales tax has recently been proposed to be utilized instead of a flat tax rate. The national sales tax, however, would only punish the poor more instead of relieving them. Since most of the middle and lower class income is spent in stores purchasing necessities and goods, it would only do them harm (Armey 7). It does not seem that a national sales tax is as fair to everyone as a flat tax. For the national sales tax to be fair, a national sales tax would ultimately have to tax all purchases of stocks, bonds, and property too.

The United States should adopt a flat tax rate to better its citizens and increase the national economy. A flat tax rate is non-discriminatory towards all walks of life with its higher tax cuts and even superior exemptions. One would be taxed on how much they take home, not what tax bracket they happen to fall into. Simply stated, the rich disburse more and the poor forfeit less. Savings, investments, purchases of stocks, and business risks would be praised rather than discouraged. Filing taxes and completing refunds would become uncomplicated as well. Not to also mention that the standard of living would expand and the prospect of the “American dream” would become more of a reality. Many would be able to enact out their desires of business relations and of what America should be: a prosperous country that is fair to all of her citizens. Everyone in the United States would be able to benefit from the newly proposed flat tax rate.


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Bartlett, Bruce. “Benefits of the Flat Tax.” August 1996. http://www.ncpa.org. 22
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