Skip to content

How the Flat Tax Works

© Ed Stein

Commentary by Ed Stein:

The Republican candidates for president are suddenly all hot to propose flat taxes. First Herman Cain, the pizza czar, came out with his loopy 999 plan. Now Rick Perry, humbled by his lack of debating skills and challenged to present something more serious than shooting coyotes while jogging, has come out with his own flat tax, which, if anything, is even more ludicrous than Cain’s. Pressed on the issue, the ever malleable Mitt Romney is backtracking on his previous disdain for the flat tax, pending how his tentative new position fares in the polls. Flat taxes sound appealing until someone does the math, which invariable shows that, no matter which version we’re talking about, a major part of the tax burden shifts from the rich to the middle class. We have a long-standing tradition of progressive taxation in this country, in which those with the most pay a higher percentage than those with less, on the theory that the rich don’t need as much of their income for necessities and can afford to part with a slightly higher portion of their wealth. The rich, as you might suspect, would prefer a different structure. The counter-argument that they and their congressional serfs dish up is that the rich need every dime so they can create jobs for the rest of us. This hasn’t happened while the wealthiest Americans have accrued more and more of the nation’s riches, but this inconvenient fact never stops the fiction from being repeated by the politicians who derive their campaign funding from the people who stand to gain the most from having their taxes paid by someone else.



  1. ebdoug wrote:

    I object to the part where you say “the rich as you suspect” want to pay less. So why did 46% of the exit poll of over 250K vote for Obama while 41% of the same group voted for McCain. I’ve had many people tell me they want to pay more. Just if the tax cuts expire at the end of next year, we who live off dividends will pay willingly more. And no, I’m not one of the rich. I’m comfortable middle class and at my age, with no debt, no car expenses, I can afford to pay more in taxes.
    Is this what we really want in this country:

    “But industry experts say that recent air disasters have been rooted not simply in planes’ age, but in a combination of other factors, including insufficient crew training, crumbling airports, lax government control and widespread neglect of safety in the pursuit of profits.”

    Wednesday, November 2, 2011 at 5:38 am | Permalink
  2. Iron Knee wrote:

    Eva, that wasn’t me talking, that was Ed Stein (the artist who drew the comic). I too think it is a misstatement to say that the rich (in general) want to pay less, but certainly some rich (e.g., the Koch brothers) do. Warren Buffett is a good counterexample. At some points in my life I would have been in the 1%, and I have a few friends who still are, and we supported Obama too.

    Wednesday, November 2, 2011 at 7:26 am | Permalink
  3. IL-08 wrote:

    The problem seems to be that the rich who don’t want to pay more taxes would rather pay millions in political grease than thousands in extra taxes. Somehow the logic evades me.

    Wednesday, November 2, 2011 at 8:53 am | Permalink
  4. Jeff wrote:

    This is simple math. When you make everyone pay the same percentage of their income, the poor will end up with less money overall since they start with less.

    @IL-08 I’ve wondered about that too. My only explanation is that the wealthy who spend all that money have a genuine disdain for the poor, and are trying to reshape our country to match their worldview: survival of the wealthiest.

    Wednesday, November 2, 2011 at 10:42 am | Permalink
  5. Arthanyel wrote:

    I think a fair tax is a proportional tax. If the top 1% own 45% of the wealth (and they do) since we use money to keep score, it means they have received 45% of the total benefits of the American society) they should pay 45% of the needed revenues for services the society requires. If the bottom 20% own less than 1% of the total wealth, the same equation holds true.

    But the key point here is the statement about the percentage of “needed revenues”. We have to keep our government spending under control and we have to stop spending money on things the society no longer wants (or never wanted). We have to curb spending on things we do want (like health care, prisons and defense) so they don’t overwhelm us. And based on how much money is NEEDED we should set the appropriate rates.

    I believe that with proper re-engineering there is no reason we can’t cut government spending by at least 20%. If we did that, had a thriving economy, and set proportional tax rates based on what we actually needed, the top tax rate might well be 25%. But trying to cut taxes further when we’re in a hole, or refusing to cut unnecessary spending, it just wrong.

    Wednesday, November 2, 2011 at 2:08 pm | Permalink
  6. ebdoug wrote:

    Sorry, I wasn’t awake. The person bullying me goes all over the world (iraq, Egypt) to put in “communication systems”. I was on the phone Friday talking to someone and said “oh, the surveyor is here now.” In about 1/2 hour bully’s mother had found a ride up to watch surveyor. And how did she know? And why is there a man made quarter size hole in the side of my house that is new and unexplained. You could take bully with you to Egypt. Scary.
    Have a good trip and write a book or give us information when you get back. I’ll buy your book. Eva

    Wednesday, November 2, 2011 at 4:45 pm | Permalink
  7. PatriotSgt wrote:

    Arthanyel in 2012

    Thursday, November 3, 2011 at 7:41 am | Permalink
  8. Arthanyel wrote:

    PSgt: I have no interest in running for federal office, but I have often thought of founding the American Realist’s Party – whose primary motto would be “Addressing our nation’s challeneges by actually trying to solve them!” And it would be dedicated to the principle that “what matters is what WORKS and produces the right results, regradless of where the idea came from.”

    Thursday, November 3, 2011 at 9:41 am | Permalink
  9. The Pessimist wrote:

    Arthanyel, your plan would never work. No one wants reality.

    Friday, November 4, 2011 at 11:31 pm | Permalink
  10. Arthanyel wrote:

    “You can’t always get what you want, but if you try sometimes, you might find, you get what you need.”

    Our challeneges wilol not be solved by sticking our heads in the sand and hoiping they go away (one of the two main strategies in Washington) and they won’t be solved by spending billions of dollars on unrelated issues (the other srategy). The problem in Washington is simple to state, but very difficult to resolve:

    1) Representatives need to actually represent the people in their district or state, not the “moneyed Americans”

    2) Representatives need to be more concerned about the ocuntry as a whole and doing what is necessary than about getting re-elected.

    I am not sure which one is more difficult to address – but I think it’s the second.

    Saturday, November 5, 2011 at 11:47 am | Permalink