[api]

Our system is far more regressive than most people realize. The poor pay more for things, don't have access to all kinds of tax breaks and cheap money, and can't afford accountants and shell companies and all the other complicated tricks you can use if you are wealthier.

I wonder: if you added it all up, would a flat tax (which is nominally regressive) actually be more progressive than the regressive taxes we have?

[bpt3]

> I wonder: if you added it all up, would a flat tax (which is nominally regressive) actually be more progressive than the regressive taxes we have?

Absolutely not. The US has the most progressive federal tax code in the OECD, mainly because we don't have a VAT like most other countries.

Nearly all of the loopholes you mention are at the federal level, where half of the households in the nation pay <= $0 in income tax.

[AnthonyMouse]

> would a flat tax (which is nominally regressive) actually be more progressive than the regressive taxes we have?

That's an easy one to fix regardless. Use a flat tax with a large fixed refundable credit. Now everyone pays e.g. 30% but gets a $12,000 credit, so someone who makes $40,000 is effectively paying zero, someone who makes $80,000 is effectively paying 15% and the effective rate approaches 30% as the number goes up. But the marginal rate is the same for everyone so there aren't all these complexities and arbitrage games, and at lower incomes the credit stands in for a lot of assistance programs so you don't get all the marginal rate cliffs from overlapping phase outs.

[ceejayoz]

> Now everyone pays e.g. 30% but gets a $12,000 credit, so someone who makes $40,000 is effectively paying zero, someone who makes $80,000 is effectively paying 15% and the effective rate approaches 30% as the number goes up.

This only maybe works if you count capital gains as regular income. Otherwise they do the Steve Jobs $1 salary thing.

Even the capital gains can be largely evaded. https://www.propublica.org/article/billionaires-tax-avoidanc... https://www.propublica.org/article/lord-of-the-roths-how-tec... etc.

[AnthonyMouse]

> This only maybe works if you count capital gains as regular income.

Yes, that's how a flat tax works. It's flat, for everything.

The nominal reason capital gains has a lower rate is that the amount of the gain is calculated without respect to inflation. But that's dumb; just use the normal rate and actually do the inflation adjustment from the time of purchase instead.