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These are IRS figures from 2008, the latest I could find. The government revenue from income tax was $1.03 T. The total income of everyone in 2008 was $8.43 T. If we went to a flat tax to collect the same $1.03 T amount it would be 1.03 / 8.43 = 12.2%. A family earning a minimum wage would have to pay 12.2% x 15,000 = $1,833 extra taxes because of the flat tax. That would really be hard to take. Government assistance would have to make up for it for poor families. On top of that would be FICA at 7.65%. That makes it roughly 20%. The FICA would bring this poor soul's payroll tax deduction to around 20%. The FICA part of Buffet's tax would be minuscule, so Buffet would be paying only around 12.2% total, not to mention his capital gains at 15%. So rather than paying 17.7%, Buffet would probably be paying 13 or 14%. That simply is not fair. In short the "fair tax" is not fair.
These are IRS figures from 2008, the latest I could find. The government revenue from income tax was $1.03 T. The total income of everyone in 2008 was $8.43 T. If we went to a flat tax to collect the same $1.03 T amount it would be 1.03 / 8.43 = 12.2%. A family earning a minimum wage would have to pay 12.2% x 15,000 = $1,833 extra taxes because of the flat tax. That would really be hard to take. Government assistance would have to make up for it for poor families.
On top of that would be FICA at 7.65%. That makes it roughly 20%. The FICA would bring this poor soul's payroll tax deduction to around 20%.
The FICA part of Buffet's tax would be minuscule, so Buffet would be paying only around 12.2% total, not to mention his capital gains at 15%. So rather than paying 17.7%, Buffet would probably be paying 13 or 14%. That simply is not fair. In short the "fair tax" is not fair.
