Is a Progressive Flat Tax an Oxymoron?

*A protestor wears stickers on his face during a tax day demonstration April 17, 2012 in New York City. Photo by Justin Sullivan/Getty Images.* *Paul Solman frequently answers questions from the NewsHour audience on business and economic news here on his [**Making Sen$e**](http://www.pbs.org/newshour/economy/makingsense/) page. Our apologies for not getting a Q-and-A up yesterday. Health issues knocked us out for day. Here is Thursday's query:* **Name: Tina Jackson** **Question:** What stops the United States from implementing a flat tax? It could be progressive depending on income, so that it doesn't hurt people with less income. **Paul Solman:** A progressive tax would not be a flat one, by definition. A "flat" tax gets its name from its lack of progressivity: one flat rate for everyone. But I think I know where you're coming from, Tina. The argument for a flat tax is that it's simple. And the fact is, a progressive tax can be simple indeed. [**Here is a link to entire 1040 return**](http://www.getrichslowly.org/blog/2007/02/05/original-income-tax-form-from-1913/), complete with instructions, when the income tax was first made permanent in this country, back in 1913. Fairly simple, wouldn't you say? Income from all sources minus deductions, exemption ($3,000 single; $4,000 married couple) and any withholding payments already made. And then, if you netted between $20,000 and $50,000, a 1 percent rate; between $50,000 and $75,000, 2 percent; and so on, all the way up to a top rate of 6 percent on net income over $500,000. To put this in perspective, [**measuringworth.com**](http://measuringworth.com/) translates those amounts into current income of at least $500,000 to over a million for the lowest bracket; at least $11 million and above for the highest. In other words, in the beginning, only the wealthiest Americans were targeted for any income tax at all. Bottom line, this was a progressive tax and it was pretty simple. The great Cornell economist Bob Frank has made a similar point with respect to the "consumption tax" he has pushed for years, and [**explained here several years ago**](http://www.pbs.org/newshour/businessdesk/2009/06/which-taxes-offer-an-opportuni.html). *As usual, look for a second post early this afternoon. But please don't blame us if events or technology make that impossible. Meanwhile, let it be known that this entry is cross-posted on the [**Rundown**](http://www.pbs.org/newshour/rundown/)- NewsHour's blog of news and insight.*

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