Flat tax fail to gain large amount of revenue from the wealthy
Duke & Davis 23 – Eli Byerly-Duke is a State Policy Analyst who monitors trends in state tax policy and conducts long-term research - Carl Davis is the research director at ITEP, bachelor’s degrees in both economics and political science from Virginia Tech and a Master’s in Public Policy from George Washington University, (“The Pitfalls of Flat Income Taxes”, 1/17/23, https://itep.org/the-pitfalls-of-flat-income-taxes/)//CG
Flat taxes are sometimes described as more stable and predictable sources of revenue for states. In large part, this is because by refusing to levy higher rates on top earners, flat taxes are blind to the soaring levels of inequality seen in recent decades and the immense fortunes being generated by the wealth of families at the very top of the income scale.
As the stock market surged over the last couple years, for instance, California enjoyed some of the fastest personal income tax revenue growth in the nation because business and investment profits flowing to affluent families are taxed at higher rates than the earnings of middle- or low-income earners. In flat tax states, by contrast, soaring fortunes at the top face the same marginal tax rate as wages and salaries being earned by middle- and low-income families.
In this light, the so-called stability and budgetary advantage offered by flat taxes is a mirage. Over the long run, states with graduated rates and sound budgeting practices will find themselves on a stronger fiscal footing than flat tax states that were not able to capture a more significant share of the windfall flowing to wealthy families.[10]