Flat Tax?

[Daniel]

Doug wrote: "A flat tax can't be progressive. You can write exemptions and
deductions into it, but after some point it gets flat. The whole point of a
flat tax is to lower the tax rate on the rich. A progressive tax system is
based on taxing the rich at a higher rate than the middle and the poor least
of all. You may be confusing complexity with progressivity - you could
eliminate
all kinds of loopholes and favors, greatly simplify everything, and still
have a progressive rate structure. A VAT, without offsetting spending, is a
regressive tax, since the lower you go on the income scale the larger share
of your income you consume. The bottom 20% spends more than its income, so a
VAT would be bad news for them."

That's pretty much what I used to think. But then I started hearing Jerry
Brown talking about a flat tax, and I began to see that there are many ways
of writing a flat tax. Just as there could be many ways of writing a VAT,
and when I set my own mind to it, I had all kinds of fun deciding what sort
of percentages to apply to minks and mercedes.

No, Doug, I am not confusing "complexity with progressivity." I know what a
progressive tax system is. But, I think you are oversimplifying the nature
of the proposals that have actually been mooted. On the other hand, I would
grant you that the overwhelming (I'd even say inevitable) probability is
that the character of a flat tax enacted by this society would be
regressive. And, I think you're probably right that at SOME cut-off point,
EVERY flat tax becomes regressive, with say billionaires not paying as much
as millionaires.

The major advantage of a flat tax written by progressives would be to exempt
completely the lower 80% of the income scale. Remember, progressives would
totally eliminate the defense budget first. I mean, we won't need that much
money after we give up the army, will we?

You're the expert, Doug, and I should probably shut my big mouth. But, the
impression I get from many people I meet is that they KNOW what a
progressive tax is, and they want a progressive flat tax. I don't see what
good it will do for you to explain that there is no such thing, but you
probably know best.

Quincy