A FLAT TAX IS NOT A REGRESSIVE TAX

Democrats are trying to change the meanings of words.

We keep hearing Democrats complaining that a proposed flat tax is a regressive tax. But, according to economics textbooks, this is not true. The problem is that the Democrats are using their own definitions of words. They made these definitions up for their own purposes. But these new definitions do NOT change the standard meanings of these words in economics.

Here are the standard economics definitions, presented along with the definitions used by Democrats:

TERM STANDARD ECONOMICS DEFINITION DEMOCRAT DEFINITION EXAMPLE
Head tax A tax that charges every person the same number of dollars A tax that charges every person the same number of dollars Book rental fees for school
Constant tax A tax that does not change with changes in income A tax that does not change with changes in the economy Real estate tax
Regressive tax A tax that lowers the percentage of income taken as income increases A tax that hurts the poor more than the rich Social Security tax
Flat tax A tax that takes the same percentage of the income of every person A tax that hurts the poor more than the rich. A sales tax on everything
Progressive tax A tax that raises the percentage of income taken as income increases A tax that hurts the rich more than the poor The US Income tax

The differences are evident. The economic definitions are based on mathematical principles, but the Democrat definitions are based on emotional feelings. Thus, the Democrat definitions are useless for any quantitative analysis.

The next table shows some common taxes, tax features, and government fees, with the tax characteristics of each:

TAX OR
FEATURE		 INCOME TYPE OTHER CIRCUMSTANCES
AFFECTING TAX RATE		 DEMOCRAT EMOTION
LOW MEDIAN HIGH OVERALL
Book rental fees
for school children		 Head Head head head A flat fee on all children.
Does not adjust for changes in income.		 Needed to fund schools.
Property tax
on real estate		 Constant Constant Constant Constant Depends on property afforded when bought.
Does not adjust for changes in income.		 Needed to fund government in recessions.
Sales tax
on all product sales		 Flat Flat Flat Flat Income controls the amount spent.
Limits purchase of essentials at low income.		 Regressive - hurts the poor.
Sales tax
on nonessential products		 Progressive Less progressive Flat Progressive Essentials are smaller portion of high income. It's a sales tax, so we say it's regressive.
Flat income tax
All pay the same rate.		 Flat Flat Flat Flat Limits purchase of essentials at low income. Regressive - hurts the poor.
Flat income tax
with small exemptions		 Progressive Less progressive Flat Progressive Essentials are smaller portion of high income. Not progressive enough to pay for government.
Flat income tax
with large exemptions		 No tax Progressive Less progressive Progressive Money for essentials is not taxed. Not progressive enough to pay for government.
Progressive income tax
with small exemptions		 Progressive Progressive Progressive Progressive Essentials are smaller portion of high income. Progressive.
Progressive income tax
with large exemptions		 No tax Progressive Progressive Progressive Essentials are smaller portion of high income. Progressive. Not enough revenue.
Business tax passed on
in all product prices		 Flat Flat Flat Flat All pay same tax rate, regardless of income. Comes out of business profit.*
Business tax passed on
in prices of essentials		 Flat Flat Flat Regressive Cuts heavily into low-income purchase of essentials. Comes out of business profit.*
Corporate taxes passed
on in all product prices		 Flat Flat Flat Flat All pay same tax rate, regardless of income. Comes out of business profit.*
Motor vehicle gasoline tax
Road and bridge tolls		 Constant Constant Constant Constant Can be an essential if needed to get to work.
Some jobs need more driving than others do.		 Nobody needs to drive.
Use mass transit.
Motor vehicle registration
Vehicle excise tax		 Constant Constant Constant Constant A constant fee, or depends on vehicle price Nobody needs to drive.
Use mass transit.
Driver license tax
renewing driver license		 Head Head Head Head A constant fee per person Nobody needs to drive.
Use mass transit.
Mass transit fares
fares charged per ride		 Constant Constant Constant Constant Low income is more likely to use. We need to fund the transit to help the environment.
Mass transit fares
Monthly or yearly pass		 Head Head Head Head Low income is more likely to use. We need to fund the transit to help the environment.
Utility taxes
and sales tax		 Head Head Head Head Limits purchase of essentials at low income. Comes out of business income.*
Capital gains tax
on factories and houses		 Constant Constant Constant Constant Taxes people for changes in price due to inflation. This tax is for the rich.**
Social Security and
Medicare taxes		 Less progressive Flat Regressive Regressive Tax begins too low to remove effect on essentials purchase. We need the money to fund retirements.
Building permit tax
new or renovated homes		 Constant Constant Constant Constant Raises cost of housing. Defrays government expenses.
Food license tax,
business license tax		 Flat Flat Flat Regressive Raises prices of essentials. Comes out of business profit.*
Unemployment tax
Workers Compensation tax		 Constant Constant Constant Constant Reduces all salaries We have to help those people.
Inheritance tax
on inherited property		 Constant Constant Constant Constant Depends on income of deceased,
instead of income of heir.		 It's a tax on the deceased.***
Trash collection tax Constant Constant Constant Constant Depends on refuse produced.
Does not adjust for changes in income.		 We need to fund recycling and the arts!
Cigarette & liquor taxes,
pet, hunting, fishing license		 Constant Constant Constant Constant Unnecessary luxuries Unnecessary luxuries

*   This is false. All business taxes must be passed on to consumers through increased product prices.

**  This is false. Everyone who sells a home and buys a smaller home pays capital gains tax.

*** This is false. If the heir inherits property, he might have to pay more than his income. It taxes the heir.

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