Regarding “Is the flat tax dead?” by Ronald Rotunda (Op-Ed, April 15):
The author asserts, in supporting the flat tax, that the share of taxes paid by wealthier people increases as marginal tax rates are reduced and decreases as they increase. He cites examples and, for some reason, stops at 1991.
He doesn’t mention that after further substantial increases up to a top stated marginal rate of 39.6 percent, the share of taxes paid by the highest-income groups, based on 1995 data, has increased compared to 1991, rather than decreasing. For 1995, those in the top 1 percent, based upon adjusted gross income, paid more than 30 percent of the total federal individual income tax.
More important, this focus on changes in marginal rates misses the key point. The flat tax effectively redefines income so that, among other things, dividends, interest and gains from the sale of investments are not taxed to the investor. Such income is received far disproportionately by the wealthy.
As a result, many of the wealthiest individuals would pay much less under the flat tax, and many would pay no flat tax at all. Thus, the flat tax is likely to shift the burden significantly away from the wealthy and onto the backs of middle- and lower-income working people.
