How would applying a flat tax decrease errors, when the progressive tax rates is just a simple formula? How would you measure gross income? Do you think that deductions should be eliminated? Which ones and why?
How would applying a flat tax decrease errors, when the progressive tax rates are just a simple formula?
The types of errors that could be eliminated are those that deal with deductions. Those who support the flat tax assume that it would be a calculation based only on income. We already have a fairly good reporting system for income: there are statements for wages, interest income, dividend income, sales of real property, sale of securities, miscellaneous income, retirement income, other income, rental income and more.
The part of the tax computation that is not policed as well is deductions. That is the area where most IRS audits focus. If a flat tax was implemented based on gross income reported, there would many fewer errors in reporting.
How would you measure gross income?
That, of course, is the big question. The Internal ...
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