The notion of fixed, flat rates is not new. It sounds logical until the question of what should happen in the event revenues from taxes drop or government expenditures need to increase. The natural response is raise tax rates equally on everyone....Increase after increase occurs until there's time to cut. This is where the fun begins. You have 3 groups; One group believes the decrease ought extend to those who earn the most under the belief that if they have more money, they'll use it to create more jobs. The other group believes you extend cuts to those who do the most consuming under the belief they will have more money to spend on goods and services. The last group are those who don't know or care.
In my honest opinion, those who think the wealthy or business owners take tax breaks and create new jobs are pretty naive or have never operated a business. Business owners hire workers in most cases for one reason, to help them meet a demand. Not because they have more cash. And more often than not, more cash is just reflected as a bigger bottom line (profits)..not jobs. Especially in cases of publicly traded cooperations where earnings can mean more investments.
It is reasonable to assume that if you cut taxes on the largest block of consumers it will have a greater impact on growth. If consumers have more income their consumption creates more demand on goods and services. That increased demand on goods and services usually spurs business to meet it and in order to do so they usually hire...creating more consumers.
Now if the effect of the model where consumer have more disposable income in the above example works that way...It certainly works in the reverse...which is why we're in the recession we find ourselves. Most average consumers instead spreading their disposable income around to various business sectors they normally would...were funneled to one business sector..the oil industry over the past 5 yrs.
Not surprising, the oil industry enjoyed record profits...while other industries suffered and many businesses within those industries now no longer operate.
