The "Cassie Tax Plan" unveiled

The "Cassie Tax Plan" unveiled

For the past few months I have been rolling around what I like to call the “Cassie Tax Plan”. That’s right, I came up with it. It’s my very own 9-9-9 plan, only better. Here’s the general idea: The Cassie tax plan would be a flat tax, but no one pays any tax on the first 20,000 dollars of income. So if you make $20,000 or less, you pay nothing. If you make $30,000, you pay a flat tax on $10,000. If you make a million dollars you pay a flat tax on $980,000. You get the idea? There would be no exemptions, no breaks, no loopholes. No more congress creating selective tax breaks catered to their friends and favorites.

Now, the next question is how high would this flat tax need to be in order to raise an equal amount of revenue as the current income tax system? I had the same question so I did some quick calculations (these are based on numbers I found online and are rough calculations so bear with me). Skip to the next paragraph if you don’t care about my calculations

According to http://www.usdebtclock.org/ the US government collected somewhere around 1,096,000,000,000 last year.

According to the same source, there are 113,347,186 US income taxpayers.

Assuming they all make at least $20,000 there would be a total of $2,266,943,720,000 un-taxable dollars.

Taking the US 2011 total personal income of $12,981,740,848,000 and subtracting the above number we end up with $10,714,797,128,000 in total taxable dollars. Dividing that by the total amount of money collected through the income tax last year and we end up with 9.77 or just under 10%.

So based on these calculations we could have 10% flat tax with the first $20,000 exempt and still meet if not exceed the current amount of income tax collected. This would provide those in the most dire financial situations with very low taxes without creating an unfair system that punishes the more affluent. Sure you’ll be giving up one or two tax exemptions that you were taking advantage of, but your tax rates will be so much lower that, odds are, unless you are tremendously wealthy person with a fantastic accountant who is an expert in deductions, you will ultimately keep more of your income. With one fell swoop we can end the squabbling about everyone paying "their fair share". Of course this small experiment only calculates income tax but we could presumably, expand this idea to include other federal taxes and revolutionize the tax system.