Debates on the U.S. Tax System

Debates on the U.S. Tax System

A flat tax system refers to the tax system where all taxpayers pay uniform tax regardless of their income (Philips, 2015). Whether an individual earns a minimum wage or owns a business and makes a huge amount of money, they will all pay the same amount of tax. The benefits of this tax system include the following. First, the flat tax system exhibits simplicity (Philips, 2015). Therefore, it is easy for people to understand how its functions and comply. This will reduce cases of fraud and errors. Second, the tax system does not require professional tax preparers and advisors. The elimination of such parties saves the money of taxpayers. Third, the tax system will encourage investment and expansion of business because additional profits made would be taxed at higher rates.

Conversely, disadvantages include the shift of tax burden from the rich to the poor. Paying uniform tax means that the lower class people will feel disadvantaged they are paying the same tax as the rich. Second, the tax system will limit the government from using the tax code to encourage desirable activities (Philips, 2015). The government cannot offer a tax credit to individuals who make their homes more energy efficient.

The introduction of a flat tax system will benefit the wealthy while the middle and lower class people will be harmed. Since the flat tax system will exempt investment income, the rich will benefit. The middle and lower class will suffer since they will pay a higher tax rate on gross income.

H & R Block is the largest tax preparation firm (Edwards, 2002). The firm has more than 90,000 workers; therefore, the introduction of a flat tax system will have the following implications. First, the company will incur a decrease in business operations because of a reduction in the number of services. Second, many employees would lose jobs because the company will require less labor in preparing taxes.



Edwards, C. (2002, February 12). Simplifying Federal Taxes: The Advantages of Consumption. Retrieved October 22, 2016, from

Philips, K., E. (2015, August 7). Our current tax v. the flat tax v. the fair tax: What is the difference? Retrieved October 22, 2016, from


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