Flat Tax Proposal: 25% with High Standard Deduction - Thoughts on feasibility?

9 Your flat tax idea is interesting because it combines simplicity with some progressivity through those high standard deductions. From a practical standpoint, a 25% flat tax with those deduction levels would likely reduce tax revenue significantly compared to our current system. The highest earners currently pay 37% at the top bracket, so they'd see a substantial tax cut. Meanwhile, the very high standard deductions would remove many middle-income households from the tax rolls entirely. Something to consider is that our current system uses targeted tax credits and deductions to encourage specific behaviors - like the mortgage interest deduction for homeownership or education credits. Your system would eliminate those incentives. Another consideration is that state and local taxes would still exist on top of this federal system, creating effective rates much higher than 25% in high-tax states. It's a thought-provoking proposal though! The simplicity would certainly reduce compliance costs and make tax filing much easier for most Americans.

17 After struggling with complicated tax situations for years, I finally found something that helped me understand how different tax proposals would actually affect my family. I was trying to model something similar to what you're proposing and found https://taxr.ai really helpful. You can upload your tax documents and it helps you understand how different tax scenarios might play out. What I found interesting about your flat tax idea is that it's actually somewhat similar to what some countries already use, but the standard deduction amounts you're proposing are much higher than what exists in practice. The tool helped me see that under your proposal, my effective tax rate would drop by about 8% compared to what I currently pay. I was surprised!

22 Just wanted to follow up about that taxr.ai site. I decided to try it out despite my initial skepticism, and I'm actually impressed. I uploaded my last year's documents and played around with different tax scenarios including something similar to OP's flat tax proposal. It showed me exactly how much I'd save or pay extra under different systems. The visualization tools made it much easier to understand the impact than just looking at numbers in a spreadsheet. It even highlighted some deductions I've been missing that could save me around $1,200 this year. Definitely worth checking out if you're into tax policy or just want to optimize your own situation.

8 I've been trying to reach the IRS for weeks about how potential tax policy changes might affect my retirement planning, but it's impossible to get through. After waiting on hold for hours and getting disconnected multiple times, I found https://claimyr.com and tried their service. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c They basically hold your place in line with the IRS and call you when an agent is about to answer. I was skeptical at first, but I had an actual IRS agent on the phone within 2 hours instead of the days I'd been wasting. The agent was able to answer my questions about how current tax laws affect retirement accounts and what to watch for in potential future changes like the flat tax idea being discussed here.

15 I need to eat my words about that Claimyr service. After complaining about it sounding too good to be true, I tried it myself when I needed to talk to the IRS about a letter I received that seemed to relate to some of the tax deduction issues being discussed here. It actually worked exactly as promised. I submitted my request around 9am, went about my day, and got a call around 2pm saying an IRS agent was about to come on the line. The agent helped resolve my issue in about 15 minutes. Saved me literally hours of waiting on hold while trying to work. For anyone dealing with IRS questions about current or potential tax policies, it's definitely worth considering.

7 Regarding the flat tax proposal - I like the concept but I'm worried about the impact on charitable giving. Currently, charitable donations are deductible which incentivizes giving. Would your system maintain any deductions for charitable contributions? If not, nonprofits and charities might see significant drops in funding. I work in nonprofit management and this is a real concern with any flat tax proposal. Studies have shown that tax incentives do influence giving behaviors, especially for larger donations.

4 Has anyone actually run the numbers on how this would affect government revenue? I'm trying to estimate it based on current tax distribution stats, and it looks like this would create a massive revenue shortfall. The top 1% of earners pay about 40% of all income tax under the current system, with effective rates around 25-30% already when accounting for all deductions. Your system would likely lower their taxes while also removing many middle-class families from the tax rolls entirely.

This is a fascinating discussion on tax reform! As someone who's dealt with the complexity of our current system, I really appreciate the elegance of your flat tax proposal. One aspect I haven't seen discussed much is how this would affect small business owners and self-employed individuals. Currently, we have a lot of business deductions that help offset the higher effective tax rates we face due to self-employment taxes. Under your system, would business expenses still be deductible? Things like equipment, office supplies, travel, etc.? If we eliminate most deductions for simplicity but keep business expenses, that creates an interesting dynamic where business owners might have significantly different effective rates than W-2 employees at the same income level. Also, I'm curious about how this would interact with retirement savings. Would contributions to 401(k)s and IRAs still be deductible, or would those be eliminated too? The current tax-advantaged retirement accounts are a major way people reduce their current tax burden while saving for the future. The more I think about it, the more I realize how many policy goals our current tax system tries to achieve beyond just raising revenue - encouraging retirement savings, homeownership, charitable giving, business investment, etc. Your proposal would essentially be saying we should achieve those goals through other means rather than the tax code.

As a tax professional who's worked with clients across all income levels, I think your proposal has merit but would need some refinements to be practical. The biggest issue I see is that eliminating most deductions could create unintended hardships. For example, medical expenses can be catastrophic - a family facing a serious illness shouldn't lose the ability to deduct extraordinary medical costs just for the sake of simplicity. However, I do like the core concept of high standard deductions paired with a flat rate. It would dramatically reduce compliance costs and make tax preparation accessible to almost everyone without professional help. One modification to consider: instead of eliminating ALL deductions, maybe keep a very short list of the most essential ones - medical expenses above a threshold, state and local taxes (capped), and business expenses. This preserves some fairness while maintaining most of the simplicity benefits. Regarding revenue, you could implement this gradually. Start with your proposed structure but adjust the rate and deduction levels based on actual revenue data from the first few years. This would let you fine-tune the system without the political impossibility of getting everything perfect from day one. The administrative savings alone would be enormous - both for taxpayers and the IRS. That has real economic value beyond just the tax rates themselves.