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 20 hours ago by [email protected] to c/[email protected]

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[–] [email protected] 5 points 17 hours ago

Depending on what your question is asking, search around for Steve Forbes Flat Tax or Ross Perot Flat Tax.

I may have this wrong, but I recall Steve Forbes was proposing to decomplicste the IRS tax codes and implement a flat IRS income tax. In other words, remove the tax brackets and have everyone pay a fixed percent regardless of income.

Similarly, I recall Ross Perot propose that the US remove income tax completely and instead charge a flat tax on purchases (sales tax). If memory serves, it was 13% (inn, addition to state and local sales taxes).

In my uneducated opinion, both of these seem like good ideas at first. Who wouldn't want a simpler tax code? Upon deeper inspection, I feel like both plans would favor wealthy Americans more than "the average Joe". As said in other posts here, the wealthy report having less income through deductions and other financial wizardry and the unrich spend a greater percentage of their income on day to day expenses.