America's Tax Bracket System: Unfair and Cumbersome

Here in America we have something we like to call “the American dream.” It’s really the idea that everyone has a fair chance: a chance for fame, glory, and, quite importantly, wealth. This makes money a driving force in this world in which we live. Society seems to revolve around the obtaining of money. In fact, when you look closely you can see that almost everything in this world seems to be backed up financially. How does this apply to the title of this article: “America's Tax Bracket System: Unfair and Cumbersome?” Many people have heard the cliché, “nothing in life is free.” That’s true, especially when it comes to running a country; this is where taxes enter the picture. Every year people prepare for April 15 by filling out tax returns. This is all fine and dandy, but there is a problem. The current tax system in America is flawed in that it is unfair to the wealthier people of the country, and that it is cumbersome for taxpayers. The method of taxing in the United States requires not that citizens pay a proportionally higher tax as they increase their annual income, but a disproportionately greater amount. (For a simple illustration of the tax brackets, see below.) How, may I ask, is this acceptable? I believe that it isn't, it must be reformed.

On April 19, 2009, the Washington Post ran an article entitled “A Progressively Unfair Tax System.” This article discussed the Congressional Budget Office’s (CBO) findings that “the richest 20 percent of taxpayers pay about 70 percent of all federal taxes…[and] 50 percent of households provide no individual income tax revenue at all.” (1) The government obtains this severely lopsided contribution of money by using a system that applies an increasing percentage of a tax as one’s annual income increases. I believe that a more fair and, frankly, simple way to generate income tax revenue is to convert to a flat tax. It would require all taxpayers to pay the same percent of their income, no matter how much they make. For instance, those making $100,000 annually would pay an amount proportional to the amount paid by those making $500,000 or $5,000,000 annually. Isn’t “fairness” a part of the traditional American dream? Then why punish those with more income by requiring such a disproportionately greater tax? Does this method not simply stifle the desire to work hard to receive more?

In addition to the fact that the tax bracket system is simply unfair, the system is very cumbersome and complex. On March 11, 2010, the New York Times ran an article entitled “The Growing Complexity of the U.S. Federal Tax Code.” In this article, a brief outline of the tax code’s growth was included. It stated “we find that the number of pages in the U.S. federal tax code have grown at a near exponential rate of 3.28% per year, which as of 2010, means that the U.S. tax code has ballooned to be 71,684 pages in length!" (2) Everyone knows that there are loopholes, deductions, and forms with which every tax payer has to deal. Many people, due to the difficult process of filling out their tax forms, simply hire an accountant to take care of the dirty-work for them. The flat tax system would be much simpler. For a brief run-down on the flat tax system, you can refer to the video below.

To many people, the move toward a flat tax could seem a little drastic and out-of-the-blue. It could easily be argued that the simplicity brought by a flat tax could have negative effects. It would decrease the work available to some accountants who obtain a significant percent of their income from providing tax filing services. In addition to that, it is arguable that with so many less forms, people may start trying (even more aggressively than they may already be) to evade paying their taxes all-together. Though these may be valid points, I believe that their negatives are outweighed by the simplicity and fairness brought on by a flat tax.

Throughout the mid to late nineteen hundreds, many countries throughout the world moved toward a flat tax system. A few of these countries include Hong Kong, Lithuania, Russia Romania, Slovakia, Macedonia, and Serbia. (3) America is known for innovation and progression. Maybe it’s time we lost the huge tax code, and started implementing an easier, fairer tax system that doesn’t punish those who work hard for their money.

(1) Click here to view the previously mentioned Washington Post article.

(2) Click here to view the previously mentioned New York Times article.

(3) http://www.cato.org/pubs/policy_report/v29n4/cpr29n4-1.html