It sure does sound fair: Everyone pays the same tax rate.
It takes just a little bit of thinking to figure out it does not work out so fairly in practice. I guess that’s what they are counting on. It is easy to say a flat tax is a good idea. Explaining how it is a scam takes many more words. The old saying goes “A lie will go round the world while truth is pulling its boots on.” Similarly, a simple lie can usually beat a complicated truth. Open your minds to the complexity…
Think of the flat tax like a fly swatter. If I use the swatter on a tiny fly, the fly dies. Using the same swatter and the same swing speed, if you swat a cat, it will probably screech, run off and avoid you for a week (possibly leaving a little gift in your shoe later). Now, again, using the same swatter and swing, if you swat future hall of fame linebacker Ray Lewis, he might only laugh at you (if you’re lucky). Now, the fly, the cat, and Ray Lewis encountered the same amount of punishment. Would you say it was fair?
But, some flat tax scammers say, that fly swatter analogy works for absolute taxation arguments (everyone pays $500), but what about percentages?
Stick this in your pipe and smoke it: the Seinfeld haircut. Jerry wins a bet (not that “master of your domain” bet again. Get your mind out of funny gutters for now.) and gets to cut off 30% of the hair from the heads of his friends Elaine, Kramer, and George.
Now, Elaine has a lot of hair. Give her a 30% haircut and there’s not much difference, just a sassy new ‘do. Kramer has a good and tall head of hair. Give him a 30% haircut and he looks quite different, but still presentable. George is not blessed with much hair. Give him a 30% haircut and he loses his grip on the term “balding” and goes almost completely bald.
The same percentage has a greater impact on some people, and a far lesser impact on others. You have to think about how much they have left. Treating them with an equal flat tax is not really treating them equally.
The flat tax is really just a way to trick people into giving the rich another big tax cut.
See http://news.yahoo.com/mayor-simpleton-223900842.html for another excellent discussion of the flat tax.