Posted: Apr 21, 08 7:12am
A fixed-rate tax that only taxes earned income places more burden on the poor and middle class. It sounds like what you are proposing would not include capital gains or investment income, but only wages (as you mention payroll deductions). Your proposal, would cause a greater shift to taxes based on consumption, which, on a percentage basis, affect those who make less (and spend a greater portion of their income). Therefore, those who make money from investment and can afford to save more are NOT taxed at the same rate. This is why the income tax rate is progressive, to insure that no one is bearing more of the burden (considering all taxation) as a percentage of total income.
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