The reality is that poor folks (and everyone else FTM) are hit by embedded taxes in the prices of goods which are inflated to the tune of 20-40% (and) are also hit with lower wages that have been forced down to allow employers to pay their income taxes, payroll taxes and compliance costs.
You saved me from saying it, but it bears repeating.
The problem with the flat tax -in addition to what you pointed out-
is that people would see almost ALL of the money that they pay to the fed.
That is exactly what they DON'T want people to know.
The cry for government reform would be much louder when people realized
that government is -by far- the largest expense that we have.
One with minimal return.
The problem with the flat tax -in addition to what you pointed out- is that people would see almost ALL of the money that they pay to the fed. Yikes!
The flat income tax would hide even more of taxes. Eliminating all deductions would increase the amount of tax hidden in higher prices and lower wages, not reduce it. The flat income tax would keep all of the existing hidden taxes and add new amounts (previously deductibles). While the overall amount of tax may not change, the proportion that is hidden would increase.
Don't forget that the flat income tax retains withholding and keeps sucking 7.65% of your money away from your check before you even see it- and don't forget the flat income tax (which is actually a VAT) forces employers to reduce your wages (or increase prices) enough to pay 7.65% of your wages to the SSA.
The flat tax, IMHO, is a non-starter. It is "pretend" tax reform.