The Need To Extend Portions of Bush’s Tax Cuts

July 8, 2010

President George W. Bush’s tax cuts are set to expire on December 31st. While Democrats labeled these temporary tax cuts as “only for the rich,” these expiring cuts will drastically impact the middle and lower classes in America. The U.S. Congress should pass an extension of these tax cuts at least for those in the tax brackets below $100,000. The reality of the situation is that 85% of Americans earn less than $100,000 per year, and only 5.5% of Americans earn more than $150,000.

I have put together a chart of the current tax rates to compare them with what they were before the Bush tax cuts, and it’s below. As a college student, my tax rate is at the current 15% rate, and would increase over 60% to 25% if these tax cuts are allowed to sunset.  

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The Flat Tax – Is It Really All Bad?

May 30, 2010

A few days ago, Craig examined the Fair Tax which is a tax system based largely on sales tax. Today, I will examine the pros and cons of the Flat Tax which is a tax system based on income taxes with everyone paying the same rate. Because everyone pays the same flat rate and loopholes are eliminated in the process, everyone pays in and everyone pays less than they do under the current system. Estimates often suggest a tax rate of 10-15%. Compare that to current rates.

Often, it is rejected out of hand as a regressive tax. At one time, I too recited the usual talking points on the issue. But after examining the issue during my undergraduate career, I began seeing it in a different light. And in recent years, a few liberal economists (a tiny minority) have begun to soften their position on the issue. The fact is that people would pay the same rate so by definition it is not a regressive tax. A regressive tax is one where those with lower incomes pay relatively more. Under a Flat Tax system, everyone would pay the same.

Today, we are locked into a system that has been rigged for the wealthy and corporations. Credits and loopholes exist for everything imaginable. As a result, of this and recent reductions in tax rates for the wealthy, the lower and middle income earners have picked up the slack through increased property taxes, sales taxes, and various other taxes and fees.

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