..the flat tax doesn't work not because of the money generated, but from the sources it's generated from.
Lets say for instance you have a cross section of 100 people. The laws of averages basicly say, lower class is 25% of that population, middle class would be 50% of that population, and the upper class would be 25%.
Now the lower class, making less than 25k would immediately be exempt from any taxes. The Middle class, making say 50k - 25k, pays the greatest amount of the tax (450k-25k=25k, x 20%= 5,000, x 50= 250000 in taxes.
Upper class, says 100k-25k=75k, x 20%= 150000, x 25= 375000
These numbers support a flat tax obviously. What it doesn't take into effect is the shrinking middle class. More than likely, the middle class drops to lower class. Only a very small percentage of that group would become upper class.
As I understand it....
Date: 2007-05-23 01:18 pm (UTC)Lets say for instance you have a cross section of 100 people. The laws of averages basicly say, lower class is 25% of that population, middle class would be 50% of that population, and the upper class would be 25%.
Now the lower class, making less than 25k would immediately be exempt from any taxes. The Middle class, making say 50k - 25k, pays the greatest amount of the tax (450k-25k=25k, x 20%= 5,000, x 50= 250000 in taxes.
Upper class, says 100k-25k=75k, x 20%= 150000, x 25= 375000
These numbers support a flat tax obviously. What it doesn't take into effect is the shrinking middle class. More than likely, the middle class drops to lower class. Only a very small percentage of that group would become upper class.