Explain Like I'm Five

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ELI5 What would happen short term if the US got rid of income taxes and went to a flat rate? What would be the long term outcome? (lemmy.world)

submitted 1 month ago by [email protected] to c/[email protected]

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[–] [email protected] 47 points 1 month ago (2 children)

Assuming you want to keep tax revenue the same, we're talking a $27k tax bill for each adult based on 2023's numbers (nothing newer was available).

Ordinary workers get shafted by taxes going up (rough guess, under $200k/year income) A few (TBH I'm not sure how many, really) pay about the same. Really high-income people make out like bandits.

If you think the economy is harsh for "regular joes" right now, oof. You're in for a doozy.

[–] [email protected] 2 points 1 month ago (1 children)

A flat rate typically implies a set percentage of income, regardless of how much you make, with no breaks or reductions.

So, a 10% flat rate on someone who only makes $30,000 is $3000, while the guy who makes $5,000,000 pays $500,000.

[–] [email protected] 0 points 1 month ago* (last edited 1 month ago)

Okay. Thank you? I think you replied to the wrong person. I wasn't asking for the definition of a flat rate income tax.