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The flat tax3/16/2024 We don’t know exactly what Perry will propose, but the non-partisan Tax Policy Center estimates that Cain’s plan (the only one out there so far) would lower the after-tax incomes of poor households (incomes below $30,000) by 16 to 20 percent, while increasing the incomes of wealthier households (incomes above $200,000) by 5 to 22 percent, on average. It raises taxes on the poor and lowers them on the rich. He’s been pushing the flat tax for years. Former House majority leader Dick Armey – now chairman of Freedom Works, a major backer of the Tea Party funded by the Koch Brothers and other portly felines (I didn’t say “fat cats”) – predicts this will give Perry “a big boost.” Steve Forbes, one of America’s richest billionaires, who’s on the board of the Freedom Works foundation, is delighted. Next week Rick Perry is set to announce his own version of a flat tax. Assuming that more commonly used deductions are eliminated, the tax burden could shift dramatically to the lower and middle classes.Herman Cain’s bizarre 9-9-9 plan would replace much of the current tax code with a 9 percent individual income tax and a 9 percent sales tax. Tax rates range from 10% to 37%, depending on income. Shift tax burden to lower and middle classes: A flat tax system could greatly reduce taxes on the richest Americans.A flat tax could also eliminate altogether some taxes that wealthier individuals tend to pay, such as capital gains, dividends, and interest income taxes. The rate could end up being higher than is politically acceptable if a flat-rate tax system were to replace that revenue. Federal revenue totaled $1.52 trillion in the first four months of the fiscal year 2022, and more than two-thirds of that came from personal income taxes, including taxes on capital gains, dividends, and interest. Lost revenue: Revenue could be lost with a flat tax system, depending on just how high that flat tax rate is.Proponents argue that reducing the top income tax rate by moving to a lower flat tax rate encourages business investment and attracts high-income individuals, increasing overall tax revenue and economic stability.
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