CNN news 2011-10-29 加文本

cnn news 2011-10-29

AZUZ: With campaign season heating up, we`re hearing some candidates and lawmakers talk about something called a flat tax. What is a flat tax? Well, the U.S. currently has something called a progressive income tax system.

AZUZ (voice-over): Means the more money you make, the higher the government`s income tax rate is. This is what those rates look like for a single person living on his or her own. The national average wage is around $41,000 a year. So you can see from this chart that this person`s federal income taxes at that wage will be around 25 percent.

AZUZ: A flat tax would make just one income tax rate that everyone pays, no matter how much or how little they earn.

AZUZ (voice-over): So one of the pros here: it`s simpler. Would make taxes a lot easier to figure out. Also, the proposals we`ve heard about are lower than 25 percent, that average wage bracket. So many Americans would pay less in government income taxes.

Businesses would pay lower taxes, too, so if people are getting bigger paychecks and spending more money, and businesses are making more money and hiring more workers, in theory, the economy would grow.

The cons of a flat tax? It`s risky. With many Americans paying less in income taxes, the government would take in less money at first, so that could increase government debt. It would also be challenging for Congress to decide what the flat tax rate would be, 9 percent, 15 percent, 20 percent.

Big debate there. And because lawmakers don`t want taxes to go up on Americans with lower incomes, there would also be a debate on who gets tax breaks to help them out.