Flat Tax Essay -- Economics

Flat TaxAn Analysis of the Flat Tax prescribe corpseShould the level measure rate system be implemented? No, the flat tax rate system should not be implemented. In this paper, the pro arguments go away be presented, which will affirm the thesis. Then the purloin arguments will be presented. A rebuttal will consequently follow, and finally, the indites conclusion will be offered.The loudest clamor against the flat tax would come from homeowners, Realtors, and builders, who would be hammered as the flat tax does aside with deductions for mortgage stake payments and local property taxes. If not negotiated with skill, this issue could be the flat tax movements Achilles heel. An analysis by the economic consulting firm DRI/McGraw-Hill estimates that the market take account of all homes could drop by 15 pct if the tax were introduced without a phase-in period. The brunt of the blow would be borne by those in middle and upper income groups. The flat tax could cause mortgage inte rest rates to drop by a full partage point, which would labor up prices. But steady so, the DRI economists calculate that were the flat tax enacted with no phase-in period, the price of a $150,000 home could fall to $113,571, a decline of 24 percent. (Dishman 39)Middle class votes who have most of their money tied up in home and hearth will scream blue murder. Nor will they be soothed by economists armchair arguments that the governments roughly $80-billion-a-year tax tribute to owner-occupied housing has led to a vast overbuilding of the nations housing stock. Roger E. Brinner, DRIs chief economist, figures the plunge in housing value would wipe out more than $1.5 trillion of householders unclutter worth. The collapse of the housing market and new home construction, Brinner predicts, would slice 1.2 percent off GDP the year after the flat tax passed, and 1.6 percent in the second year. (Dishman 39)A potentially troublesome law lurks in the flat tax plan of House Majority Leade r Richard Armey. The Armey flat tax plans to eliminate business exemption for most fringe benefits, specially employer paid health care. Flat tax enthusiasts like Harvard University economist Dale Jorgenson postulate that employers, who look at the total cost of compensation, would simply increase their employees notes compensation, leaving them free to purchase their own health insurance. In theory, the workers then bec... ...rth noting that, for the politician who withdraws money from a campaign fund for personal use, even if it is unlawful to do so, this is taxable under the present law. But it appears to be tax-free under the flat tax. The typical wage earner for sure has the right to be skeptical about this fair and honest tax. (Robertson 26)In conclusion, it is clear that the flat tax rate is not a well-behaved concept which would be beneficial to the people. The current tax system, for now, is by removed the better choice.BibliographyWorks CitedAstrikson, John, Flatten ing Taxes, Consumer Reports December 1995, 34-37Darell, Bobby, Modern Economy, stark naked York Harper, 1994Dishman, Kris, The Science of Taxation, saucy Haven Yale, 1996Flanegan, Jim, The Treasury, Cambridge Harvard UP, 1995Henderson, Margaret. A Look at the Economy, New York Dell, 1994McAfee, Charles, The National Debt, New York Appleton, 1993McNamara, Ellen, Your Tax Dollars at Work, New York Bowker, 1995Miller, Shawn, Commerce and You, New York Norton, 1996Robertson, Oliver, Learning the System New York Grove, 1994Tarik, Alfred, The Economy and the System Boston Houghton, 1993