Like lots of Americans, President Donald Trump hates the hassles involved with filing and paying personal income taxes. But unlike lots of Americans, he's in a position where he is going to exercise some influence over the issue.
But why should he have all the fun?
When it comes to making personal income taxes easy, not much comes close to the flat tax, where we've made it possible for you to develop your own hypothetical personal income tax system for the entire United States. All you need to do is set the tax rate and enter the value for an individual tax credit into our tool below, and we'll figure out how well your personal income tax plan would mean for both you and the country if the U.S. Congress went along with it! [If you're accessing this article on a site that republishes our RSS news feed, please click here to access a working version on our site.]
If you've run the tool with our default data, you've found that we've nearly matched the U.S. government's actual personal income tax collections without much straining.
But maybe the better question is would President Trump go along with such a simple flat tax plan, considering that what he proposed during the campaign was so different. Not that proposal means much at this point other than that the President will indeed seek to cut taxes, because with Trump, many of his proposals are more often than not just the opening bid for a big negotiation.
One last thing. The U.S. already has, for all practical purposes, a flat tax of 35%, where the rate is set that high to account for all the games that U.S. politicians have played with the tax code over the years at the behest of their most influential donors and their desire to buy lots of votes through popular tax deductions, exemptions, credits and eligibility for various welfare benefits. Regardless of how much income you have, that works out to be the average effective marginal tax rate that people across the entire income spectrum pay.
Since we're in for a negotiation, we might as well know where we stand today so we know if the deal that's offered is a good one!
About the Tool
We used our model of the 2010 aggregate distribution of household total money income for the U.S. in generating the “how would the federal government do with your flat tax?” portion of the tool, along with the U.S. GDP and the IRS' count of the number of exemptions reported on tax forms for 2010.
The rest was just simple math! (Trust us – you should see how the IRS does quadratic equations!)
White House Office of Management and Budget. Budget of the United States Government: Historical Tables Fiscal Year 2012. Table 2.1 – Receipts by Source: 1934-2016. [Excel Spreadsheet]. 14 February 2011. Accessed 28 September 2011.
Bureau of Economic Analysis. National Income and Product Account Tables. Table 1.1.5 Gross Domestic Product for 2010. [Online Application]. Accessed 13 February 2017.
Internal Revenue Service. Selected Income and Tax Items for Selected Years (in Current and Constant Dollars). Individual Complete Report (Publication 1304), Table A, 1990-2010. [Excel Spreadsheet]. Accessed 13 February 2017.
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