Flat Tax Advocates, I need your help?

Ulrike Hert: it depends on the structure of the Flat Tax, most likely. If it is a modified version of the income, based on reportable income, yes, most likely. But, if they take the other option that is being kicked around, that of a nationwide consumption (sales) tax, most likely the feds will preempt the state laws, and will reduce down or eliminate most state sales taxes, thus leaving the states with only property taxes and user fees to take care of their needs? Too radical, they would never do it? don't kid yourself, this is the same federal system that gave us Medicare....Show more

Cherlyn Tefera: Almost certainly. Both the federal government and the states both collect taxes to fund their operations. If the federal government overhauled their tax structure and adopted a flat tax (or any other kind of tax), that would have no impact on the states. Since many states base their income tax on the federal AGI, the states may need to adjust how their income tax i! s determined. But there would be no reason for states and local governments to abandon existing sales taxes....Show more

Lita Thammorongsa: There could be. There's nothing saying that what the federal governement does to change income tax policy will have any impact on what the states do with sales tax.