Flat Tax Essay -- Economics

Flat appraiseAn Analysis of the Flat Tax Rate SystemShould the compressed levy income rate system be implemented? No, the flat measure rate system should not be implemented. In this paper, the pro arguments will be presented, which will affirm the thesis. and so the con arguments will be presented. A rebuttal will hence follow, and finally, the authors conclusion will be offered.The loudest clamor against the flat task would come from homeowners, Realtors, and builders, who would be hammered as the flat tax does away with deductions for owe interest payments and local property taxes. If not negotiated with skill, this phone number could be the flat tax movements Achilles heel. An analysis by the economic consulting firm DRI/McGraw-Hill estimates that the market value of all homes could drop by 15 percent 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 function point, which would chore up prices. plainly even 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 defy of 24 percent. (Dishman 39)Middle class votes who have most of their money tied up in home and hearth will scream unconsecrated murder. Nor will they be soothed by economists armchair arguments that the governments roughly $80-billion-a-year tax subsidy to owner-occupied lodgment 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 net worth. The collapse of the housing market and new home construction, Brinner predicts, would musical composition 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 uprightness lurks in the flat t ax plan of House Majority loss leader Richard Armey. The Armey flat tax plans to eliminate business exemption for most bang benefits, especially employer paid health care. Flat tax enthusiasts like Harvard University economist Dale Jorgenson argue that employers, who look at the total cost of compensation, would simply step-up their employees cash 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 individualized 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 certainly has the right to be skeptical about this fair and candid tax. (Robertson 26)In conclusion, it is clear that the flat tax rate is not a good concept which would be beneficial to the people. The current tax system, for now, is by far the better choice.BibliographyWorks Cited Astrikson, John, Flattening Taxes, Consumer Reports December 1995, 34-37Darell, Bobby, Modern Economy, New York Harper, 1994Dishman, Kris, The perception of Taxation, New Haven Yale, 1996Flanegan, Jim, The Treasury, Cambridge Harvard UP, 1995Henderson, Margaret. A Look at the Economy, New York Dell, 1994McAfee, Charles, The case Debt, New York Appleton, 1993McNamara, Ellen, Your Tax Dollars at Work, New York Bowker, 1995Miller, Shawn, Commerce and You, New York Norton, 1996Robertson, Oliver, training the System New York Grove, 1994Tarik, Alfred, The Economy and the System Boston Houghton, 1993