Why is a flat tax such a bad idea? A flat tax is exactly what governments should be using. Operate inside the tax revenue (under a fixed tax rate) and don't raise taxes when some programs don't get funding. Instead, cut the program out! Cut the fat out! Cut out projects, cut out anything that would require the tax rate to increase.

I have to manage my budget this way. I can't demand a raise just to buy an iPhone, I have to cut something else out in order to afford it.

Why is this so hard for some groups to understand?

Of course when you do something right where there aren't 50,000 hoops you can jump through to avoid paying taxes, and fudging numbers in a liberal minded view, IT'S ALWAYS THE WRONG THING TO DO! 5% is a great thing, just imagine if the Feds went to a 5% flat tax too! That is just 10% total!!! That would be so easy, 5% State, 5% Federal, 10% God, 10% your own savings, and 70% bills and personal spending! How simple would that be!!! Governor Huntsman I am on your side all the way!!!

Dishonest people can never accept the simplicity of this system. It's too easy to do it right, do it honestly, and do it fairly. I mean 5% to a man who makes $100 a month is $5.00, 5% to a man who makes $1,000 a month is $50.00, and to a man who makes $10,000 a month is $500.00. It is fair and everyone pays the SAME according to the amount they make. What is the problem? You will always have whiners I guess???

The government provides services to all citizens, all citizens should pay taxes. Initiating a flat tax is the fairest form of taxation. It does not give discounts to the wealthy, as they pay the same as the poorest tax paying individual. 5% is 5% Progressive Tax brackets are not fair, and is not progressive, it is wealth redistribution. Anything other than a flat tax rate is the governments attempt of stealing from the rich and giving to the poor.

I agree.

A small trivia question for us.

Question: Who was the first modern economist/philosopher to strongly advocate for a progressive tax system?

Answer: Karl Marx.

A progressive tax system is one in which the more a person makes the larger percentage they pay in taxes. The reason Karl Marx advocated this is his mantra of "from each according to their ability, to each according to their need."

The idea is that ultimately all people would have about the same amount of money to live on. He hated wealth and wealthy people. So if a person made $30k a year, they paid nothing in taxes. If they made $100k a year their tax rate would take enough taxes to leave them roughly $30k to live on.

These initiative supporters are making incremental arguments. We should keep in mind that before Reagan got to it the highest tax rates were well in excess of 70%! If I remember correctly even higher than that!

We do a flat tax for all purchases, it is good enough for income. If people make more, they pay more. Make nothing, they pay nothing.

Huntsman is right!

Those who support and believe in the teachings of Jesus Christ are called Christians. Those who suppot and believe in the ideas of Karl Marx are called Marxists. Where does Marxism actually work?? Please show me. Please please I would love to see where in the history of the world and all time, where it has worked?

The progressive tax system taxes based on ability to pay. The poor and middle class are less able to pay than the wealthy, so they are taxed at progressively lower rates.

The flat tax does not consider ability to pay, so the wealthy are taxed at the same rate as the poor and middle class. The result of changing from a progressive system to a flat system is that the wealthy got a huge tax break, and the middle class got no material tax break (if you're a middle class Utahn and dispute this, just check your state tax refund this past year and compare it to previous years when we had a progressive system).

While on the surface, the flat tax appears more fair, it isn't if you calculate taxes as a percentage of gross income. If you are poor or middle class, your taxes as percentage of gross income remained the same, and is a much higher percentage than the wealthy's taxes as percentage of gross income, which was already lower than poor and middle class percentage under the progressive system and is still lower under the flat system.
while the wealthy's taxes as percentage of gross income

What Progressives (aka liberals) like to point out is that the rich guy can afford to have more of his income taken away in taxes.

$50.00 is a lot of money to someone making only $1000 per month. However, to a someone making $10,000 per month it's peanuts.

As long as the percentage is the same I don't see a problem. I want my government to treat us all equally when it comes to taxes. Maybe that way it will encourage us all to get out and work our behinds off to get ahead.

After all, if a liberal / socialist government is going take more and more of my hard earned money. Why should I work so hard? I'll just rest on my back side and let the government supply me with what I need.

How is progressive tax any different than an employer (CEOs, oil execs, business owners, etc.) paying his employee wages? An employer never shares his profits evenly; he keeps the lions share for himself. After all the point of getting rich is to avoid drudgery and enjoy the benefits of other laborers. How then is a progressive tax not just? Isn’t it fair the wealthy pay proportionately more (in taxes) when they keep proportionately more? Isn’t this just?

Progressive or flat tax has nothing to do with budget cuts or over-runs only with who pays what portion; both taxes can be raised or lowered accordingly.

"If you are poor or middle class, your taxes as percentage of gross income remained the same, and is a much higher percentage than the wealthy's taxes as percentage of gross income, which was already lower than poor and middle class percentage under the progressive system and is still lower under the flat system.
while the wealthy's taxes as percentage of gross income "

Is this new math of some kind??? - where I live if everyone is taxed 5% on their income; everyone pays the same percentage.

a no-brainer! There are always folks armed with statistics to "validate" their particular points of view, but doesn't it just make sense to tax us all at the same rate? I've been broke most of my life, have never been able to afford much, but sure didn't feel the need to apply to the government for some of the money they took from rich folks. Now that oil prices are up and I'm making a lot of money, I can't see why I should be expected to pay an ever-increasing percentage of it to an inefficient government. I realize this isn't an educated opinion - there are enough college graduates out there who will regale us with those. This is just one old guy thinking "Hunstman got it right."

"Is this new math of some kind???"

It's called gorilla math, the libs love to use it to confuse their constinuents into voting for things they don't understand as Progressive just pointed out. God Bless America!!!

you typed "Isn’t it fair the wealthy pay proportionately more (in taxes) when they keep proportionately more? Isn’t this just?"
Yes, if this was a big piece of cake, and my "keeping proportionately more" meant there was less for you - that would be unfair. But our economy doesn't work like that. One person well off is not offest by several others going without in order to balance things out. Your point has no validity.

I totally love this class warfare crud on this subject. We could not have made it more perfect to have a openly Marxist proposal on the ballot than this.

The person who worries about the poor paying more of their income with a flat tax doesn't understand it. These poor people still get their tax write-offs. This means that in general they pay no taxes at all on the first $20-30k they make.

Say they make $40k they would get to write-off mortgage, children, etc. In Utah they also index this against the Federal taxes they pay. So most of what they make is tax exempt. Someone making $40k might pay taxes on $10k or less. This means their total state income tax would be roughly $500.

A person making $1million would get the same $20-30k in tax write-offs, likely more since few salaries pay that much. They are likely a sole-proprietor. Ultimately they will pay 5% on hundres of thousands of dollars of earned income.

Middle class pays $500. Millionaires will pay tens of thousands of dollars.

I'm fine with that. Only Karl Marx and the Democratic party think its unfair.

Obama is bringing out the communist rhetoric. ug!

That Karl Marx idea sounds swell. What a great way to encourage people to succeed and build businesses. I would love to work all my life to build a successful business and have the government take most my money and give it to those that don't even try. Great idea!!

Flat tax is the only fair way.

This Karl Marx guy kind of reminds me of Obama. Of course most democrats will take this as a compliment.

If the parallel calculation used on the 2007 state tax return was actually a comparison of the old progressive tax system and the new flat tax system, Mr. Frandsen's assertion that the flat tax will hurt the middle class is spot-on. I am a middle income person and my calculations for 2007 showed I would have paid $1,741 more under the flat tax than the progressive tax. For me, it's a no-brainer - take Huntsman's flat tax and put it in the trash.

A pure flat tax means the flat rate is based on adjusted gross income. Thus, there is no deduction for mortgage, charitable deductions, etc. You pay on your gross income.

I actually agree with that. There is no reason government should subsidize life choices through tax breaks.

I also think the first so much of income (perhaps 40k) should be exempt from the flat tax as this is a basic living wage. Thus, someone making 50k pays tax on 10k ($500). And, someone making 1M pays tax on 960k ($48k).

How about going to a federal flat tax of 10 percent across all income brackets and a 10 percent corportate and dividend tax. The only exemption is a $5k per person exeption (i.e. a family of 5 making $40k a year pays a 10 percenty take on $15k, so $1.5k a year in federal taxes). And then to compensate for a fair and equal tax, institude a federal sales tax of 10 percent on all non-food items. That way, those who spend more on expensive toys, luxury items and homes, pay more in taxes based off what they use and spend.

Seriously, think about it and give me an intelligent reply as to why it would or wouldn't work.

So why don't we tax rich people at 100%? After all, no one needs more than, say, $250,000 a year. Why not set the tax rate at 100% on everything over that amount?

Answer: Because no one would do any work once they earned the $250,000 limit. Doctors, Lawyers, CEOs, etc. would just close up shop in April or May and take the rest of the year off. (In fact, no one would bother going to medical school in the first place, knowing they could never make more than $250k.) The government would get nothing in taxes at the 100% rate.

No one would bother to invest or build up a business that hires lots of workers either. The economy would be a wreck...but we would not have any rich people to envy though, so it might be heaven.

Having a few low flat rate taxes (Federal Income, State Income, State Sales, Federal Sales) would work as long as they didn't all add up to a big percentage.

The problem is that government should be able to function well with about 20% of total economic activity, but they can't control spending. To get votes and grant favors, politicians love to promise everything under the sun with our tax money.

They also love to control peoples' lives through the tax system. They couldn't do that with a flat tax.

Actually, a FAIR tax would be to get value back for your payment. The flat tax is an improvement, but the rich are still getting ripped off. Stop coveting what is not yours, slackers.

Business owners pay quite a lot more than their fair share of taxes. Taxes that non owners never see, such as personal property taxes, the other half of social security and medicare payments. For a company of only 50 employees that equals over $180,000. depending on assets. Enough money to pay the wages of 3 more employees. That doesn't include real property taxes, which business owners tend to have more of, and higher incomes that these business owners also recieve that is also taxed. Where I work that just those taxes alone would be enough to support 10 more workers at $60,000 annualy.
The point is, we are a market economy, government should be here to support that market by ensuring fairness, providing legal support, and ensuring the essential public infrastructure is built. Anything else is government interferance.
The more simple the tax system is, the less subject the system is to fraud, and to negligent spending by the government.

For those who want the government to give them more stuff that is taken from the so called rich you should remember that for every dollar the government takes it keeps a very large percentage for operating costs (the feds being the largest share) which means that any taxes will be abused by the government. This all means that it would be best to restrict the government to the absolute minimum and those citizens who need extra should just go to their rich neighbors and ask for it to avoid the high percentage of government rip-off as a do-gooder middle man.

To the comment from 2:41, you are definately correct. I would completely agree with you.

What I was describing is what we have in Utah.

You are describing the ideal, which I support.

Last year my brother in law made $54k, with write-offs, three kids, etc he paid $4500 in Fed taxes and almost $600 in State taxes. I helped him do his taxes.

Current is system is fair. I would like to have our current national income tax changed to what you describe.

So. I agree with most of what people are saying. A flat tax seems reasonable. Well. I pulled out my returns from the past 3 years, and every year the alternative tax was cheaper than the flat tax! Go figure. And my income was not extravagent, around 50K. So why would the progressive tax be more? I have no idea. But that's the way the software spit it out. I challenge you, before you post here, pull up your old returns first. You may be surprised.

Utah's income tax rate is in practical terms a flat tax and not progressive. The highest rate kicks in at $11,000 for married filing jointly with a rate at 6.98%.

The big difference is "this flat tax" rate proposal nixes a lot of deductions, namely mortgage interest and contributions.

For the average Utahn this is a tax INCREASE.

I agree with the plan to do away with income tax all together, on both the state and federal level. Institute a federal 10% sales tax, and a state 5% sales tax. Instead of getting income tax breaks, low income families would get breaks on their sales tax rate.

That way, instead of looking at the wealthy vs. the poor, you're looking at big spenders vs. low spenders. It gives incentive towards people who save their money, instead of penalizing people for working their tails off to earn a lot of money.

If you're a wealthy person, and you're buying boats, cars, houses, jewels, plasma tv's, etc., you're going to pay more than the guy who buys just the necessities.

It might even keep people from racking up credit card debt they can't afford.

@JMT makes the critical point here...ideally a flat tax is OK, but it shouldn't necessarily kick in with the first $1 of income. Rather we can set a threshold for basic cost of food and shelter, and all income beyond that is flat-taxed.

We can argue all day long on tax breaks for kids and mortgages though. There are compelling reasons to offer breaks for certain activities and situations, but drawing those lines are difficult.

According to CNN last night, only 40% of americans pay income taxes. So I say, bring on the flat tax and let everyone contribute to schools, parks, roads, etc.

Wow I'm amazed to see how greedy some of you Utahns are! If you really think $5 to someone that makes $100 means the same as $500 does to someone that makes $10,000 you are a nieve Idiot that has never been on the $100 side of life. And for Lane Meyer that asked when taking from the poor and giving to the rich has ever worked; I can't think when it has worked, but many have tried. Like in the New testiment when the followers of Christ put all of their belongings at the feet of the Apostles and "all things were in common." Also in the early days of the lds church when members tried to live the Law of Consecration but couldn't because of greed. Those that have more should be willing to pay more to a society that has helped them get where they are. I'm not saying they should pay 100% of their income, like those mentioned above tried in the past. However, a little higher percentage than those less fortunate would be nice.

The real problem is that a so-called "progressive" tax is the most regressive, divisive, and harmful scheme ever dreamed up by the mind of man.

"Progressive" taxes not only pit rich against poor, in a game to see who can cheat the other out of the most, they also kill the economy and deny the government needed revenues.

As has been shown over and over and over again, if you want the government to take in more revenues, CUT taxes. If you want to kill the economy and make everyone poor, including the government, raise taxes.

Works every time.

Wasn't MacDonald one of the guys from the Tax Commission who was providing the Governor with bad data when he was pushing the flat tax through the legislature? I guess MacDonald couldn't kill it by bureaucratic subterfuge, so now he's back to try to screw the Governor again.

How about taking it one step further. Have everyone pay the same amount. If we're all consuming the same amount of service, why not make everyone pay the same number of dollars? The movie theater doesn't ask how much money you make when they sell you a seat, why should the government ask you how much you make for providing their services?

1% of America pays 40% of all taxes.

I am fortunate enough to have a job that pays me very well. I choose to live in Utah and the USA and therefore agree to abide by the laws of the land, including paying my taxes. I am a business owner and have an average of 50 employees, most of whom work very hard, which I greatly appreciate. My problem with the progressive tax plan is the government is forcing me to give them the money so they can then turn around and give a little of it back to my employees. I would rather give the employees raises and bigger bonuses than give the money to the government to squander with their gross inefficiency. The flat tax allows me to surrender less to the government and return more of the money to the employees or reinvest in business growth (which creates more jobs and higher wages for all employees).

There are some who wrap the America flag around the flat tax system and brand all who oppose un-American. They equate progressive taxes to Marxist or socialism. These extremes install fear in the unsuspecting middle and lower classes. Progressive tax is not wealth redistribution; the wealthy are thriving just fine and the not so wealthy are still struggling under the current progressive tax system. Progressive tax - not flat tax – is based on fairness.

Consider:
Employers never spit profits evenly with employees; they keep the lions share for themselves at the wage earners expense. This is business as usual - capitalism. No argument. Yet, when the same methodology is applied in the form of progressive tax its called socialism. Why? Shouldn’t a two sword swing both ways - to be fair? To swing one way only benefits the wealthy. Besides, it seems to me the progressive tax resembles American capitalism more than the flat tax.

Progressive or flat tax has nothing to do with flag waving or simplicity; only with which is really fair; flat taxes mean well but both taxes can still impose a complicated system of deductions, types of incomes to tax, etc.

The law of consecration doesn't work yet because of greed AND idleness. Look at the communist countries today. Those institutions have systematically taught people to only do the 'minimum required by the state'. Principles like initiative, hard work, delayed gratification, thrift, etc. have been completely lost. The rich pay more in taxes under the flat tax system, they just don't pay 50%+ under the graduated tax system. I just wish the Feds would understand the principles of the flat tax as well.

I hate the "flat" tax. The previous one was better. Someone working part time got a break, and most everyone else got the same rate.

Right now the first X doesn't get taxed, then at each range of income there is a % the federal government takes. 15% at one level, if you make anything over that level the amount above gets taxed at 25%, and so on. Each level's take is added up and that's your responsibility to pay. So the more you make the more you are taxed. So I don't get this line that the rich should pay more when they actually are, it's set up that way currently. Why are politician's lying and suggesting they aren't? To get elected. The wealthy aren't benefiting. They are paying more at each tier of income they achieve.

A sales tax would just reduce consumption.

Sweden's socialistic system provides benefits so great, you barely have to work for a living. The problem is, to pay for it, they have a progressive tax curve so steep that a garbage collector ends up netting about the same as a doctor. So who wants to work their tail off to get through med school to earn the same as the average worker? The result is most of the doctors there now are from India Bangladesh, etc.

The rich should see how the poor live, true enough
But the poor should see how the rich work.

Attorneys and tax preparers will probably be opposed to the flat tax simply because it will take work away from them. The more complex the tax code, the more job security. The Kiss principle applies here.

Most of the posts here are only about trying to pay less. It should be what is the fair price for what I am receiving, as well as, what will help society raise the std. of living. No one likes taxes! But of the two systems proposed which one is simpler, easier to understand, best to administer, most reliable for budjet projections, and least likely to be misinterpreted and abused. I'll submit that it is the flat tax. It justs reminds people to much of the good ole days of Monarchy.

Because of an extensive background of 7 years in college (at my own expense-not paid for by anyone but me) I make over one hundred thousand a year.
I was out of the work force for 8 years (7 in college and 1 in an intership) living on 2 dollars an hour cleaning building. I worked my rear off for those years, and now reap the rewards. Why should I have to pay a progressive tax so others can goof off. It seems those seeking a progressive tax want to punish people like me that set goals and obtained them through hard work. My work is in the health sector, and my labor is much in demand, as their are to few of us. I am asked to work overtime almost weekly - to help people in medical need. Any more, I ask myself why. I lose 50% of my wages on overtime. You do the math - I make more on strait time than overtime after taxes. Yet I want to help people, and all they want in return is to tax me higher? Maybe I should just give up and drive truck.
Think about it.

Taxes should be EQUAL for everyone.

The Constitution calls for everyone to be treated EQUAL.

$10 = $10.

Why should I pay more tax because I work harder than someone else? EQUAL is EQUAL.

Flat Tax seems like a great idea. works for the LDS church at 10%. why not the government at 5% for state and 5% for feds. We need to stop subsidizing the UN as well. we need to cut the silly Head Start programs out there. we need to encourage folks to work and get off the bench and do some skating and scoring of goals.

One clarification for some people. We currently have a flat tax in Utah.

The point of this article, and this group, is that they want to end that and go to a progressive tax scheme that would kick in for fiscal year 2010. That means that on April 15, 2011 you would pay the new Marxist tax plan.

I would like to do a different type of tax plan. I say that we allow certain write-offs, so that the first $30k is not taxed and after that it is taxed at a flat rate.

I say from $0 - $30k they pay 1% tax. That would mean a person making $29,999 would pay $299.99 in State Income Tax. Someone making $10k would pay $100.

Right now we have one half of the society paying no income taxes and demanding the other half pay more. Let those folks pay something and see if they want to increase taxes anytime soon.

Nothing like paying something of your own way.

I think if Utah wants a flat tax it should demand that rich people also send their kids to die in Republican wars in equal numbers to the poor in order to protect your so-called "fair" society.

Let's just set aside the fact that progressive income taxes have been the foundation of every civilized society in modern history and flat-tax societies tend to become second-world backwaters with a couple of rich people and everyone else desperately poor.

Let's also just set aside the need for intelligent regulation of our nation's banking and financial system... oh we already did that. Worked well didn't it?

And by the way: Sweden has a faster growing GDP and higher median income than the US. The greatest argument these dimwitted Americans make against progressive societies is that it will hurt the US economy. Interesting that Europe is cleaning our economic clock.

"Employers never spit profits evenly with employees; they keep the lions share for themselves at the wage earners expense."

Employers may not "split" profits evenly with employees, but they don't split expenses or risks either. Most rich entrepreneurs have taken enormous risks before they reap the rewards.

Why do some people think that if an employer makes a lot of money, he does it at the "expense of the worker"? Every employer has to pay every employee what they are worth. Otherwise the employee leaves for someone who will pay them what they are worth.