What is Helicopter Money?

By: Alexandria Pendergast

Helicopter Money is a policy made by the government, so help distribute money after they print new money. How they distribute it, is by giving it directly to the public. It is also used through tax rebates. They will give tax rebates to the public so that they receive more money, though this is a more roundabout way to do it. So if you get a higher tax return or a tax rebate, it is how the government is trying to give the public more money in their pockets.

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Taxes vs Flat Tax

By: Alexandria Pendergast

What is a flat tax? So many people think that a flat tax will cause the poor to pay even more in taxes. That is false. Based on the huffington post article, the average American pays around 10 percent in taxes, and the poor pay higher than that currently. That is because of a trickle down style of taxes, each tax bracket causes an increase amount you pay in taxes. The United States has a Progressive tax, which means as someone’s income increase the taxes they have to pay will increase. Say someone goes from making 9,000 a year and have to pay 10 percent in taxes to making 10,000 dollars a year and must pay 15 percent in taxes. That is how the bracket system works, but then they add deductibles to your taxes to make you pay less. You can get tax exemptions if you are Single, Maried Filing Jointly, Head of Household, and personal exemption, to name a few. Now the PEP and Pease are two provisions in the tax code that will increase taxes for high-income earners. Once a single person makes 259,00 dollars, married filing jointly makes 311,300 dollars, or head of household makes 285,350 dollars, these two provision will apply. Let us make taxes get more complicated with the alternative minimum tax. This tax was created in the 1960s and has not been adjusted for inflation. This was raised in 2013 so the middle class was not hit by this tax, since it was created for the richer individuals. This is another layer of taxes added to your bill. Then when you look at your paycheck you have the earned income tax credit. Now to counter this overly complicated taxes, big companies and richer individuals will get government subsidies to pay less money on taxes. These subsidies are and tax exemptions are used to decrease the percentage to the richer paying less than 1 percent of their income on taxes. These subsidies the problem with the tax system, otherwise the rich would get taxed more than the poor, like it was intended to do. Subsidies are even more complicated I will cover it in a later article. Subsidies though decrease the amount of taxes an individual or company needs to pay.

The way I would counter this would be with a Flat Tax, and the removal of subsidies. A Flat Tax is when everyone in the country pay’s the same rate, let’s say 10% is the taxes. There would be deductions or exemptions or additions to the taxes. This would create a more consistent form of taxes to be paid. Since there are no exemptions or special additions the amount would make it so there would be more money from taxes coming into the Federal and State Government. The countries who have put a flat tax on their country and seen a huge amount of economic growth, up to 6 percent. One of the problems is that these countries are partially tied to the United States and the biggest amount of their growth is during the 90s, when the United States was very stable and had a good amount of growth too. So there is a direct correlation and a heavy amount of data to say causation, but still there is doubt if there is actual truth to this statement. In the comments below what do you think is a good idea?

References

Jarmon, Jack. 2009. University of Pennsylvania. 3 1. http://repository.upenn.edu/curej/130/.

Kavoussei, Bonnie. 2012. HuffPost. 9 21. http://www.huffingtonpost.com/2012/09/21/poor-americans-state-local-taxes_n_1903993.html.

Pomerleau, Kyle. 2015. Tax Foundation. October 14. http://taxfoundation.org/article/2016-tax-brackets.

Povich, Elaine S. 2015. The Pew Charitable Trusts. January 15. http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2015/1/15/the-poor-pay-a-higher-percentage-of-income-in-taxes.

n.d. The Huffington Post. http://www.huffingtonpost.com/news/government-subsidies/.