Flat tax not fair for lower-income workers
At the eater y today I over heard the conversation at the next table and the topic was a flat tax.
The quote was “ if everyone just pays 7 percent of t heir income we would collect more money in federal tax than we do now”.
Sounds good but let’s put a pencil to the idea by using two examples, one a single mom with a child to care for, who pays currently no tax, and a millionaire whose annual income today is $1,000,000 and pays $320,000 in tax.
The single mom work s 50 weeks a year and averages 40 hours a week at minimum wage of 7.25.
At that her annual income is $14,500. Under the 7 percent f lat tax she would now pay in $1,015 and end up with only $13,485 annually or $1,124 of spendable income monthly.
Her budget consists of $600 a month for a decent safe apartment to live in, $170 deducted from her check for health insurance, $200 for groceries, $100 for utilities and $80 for gas to get to work.
Oh no that total is $ 1,150 or $ 26 more than she has to live on.
The millionaire is in the 32 percent tax bracket and thus cur rent ly pays $ 320,000 in income tax.
He has $680,000 in spendable income or $56,667 a month.
Bygoingtoa7percentflat tax he would have his tax would be reduced to $70,000 and thus his spendable monthly income would increase to $ 77,500 a month.
So what would he spend the extra money on? Maybe a new German-built auto or maybe a larger Italian-built yacht.
So I will let you guess which one, t he sing le mom or t he millionaire, is pushing the flat tax.
And as for the person at the other table, shame on you; you are a better human being than that.
Tommy Grimes email@example.com