Flat tax is not a fair tax

In Monday’s Guest Editorial, John Hendrickson of Iowans For Tax Relief says “all taxpayers in Iowa will see tax relief” from the recently signed legislation. This statement is patently false! Iowa income taxes are graduated ranging from 0.33% up to 8.53%. Anyone making less than $28,000 a year is currently paying less than 4% in Iowa Income Tax. The new 4% flat tax will raise taxes on everyone in Iowa making less than $28,000.

Proponents say the “flat tax is a fair tax” but economists have shown that flat taxes are regressive, that is, they are a greater burden on low-income workers. The question should be, is the tax system equitable and just? Is the tax burden distributed among taxpayers so that taxes are equally “painful” for everyone? Obviously, the new Iowa flat tax fails this test. Low wage earners (predominantly young people, minorities and single women) will be paying more in taxes to subsidize a tax break for high wage earners. In fact, Iowan’s making $1 million dollars will get a $40,000 tax cut. Is this “fair?”