What AI Thinks of My Proposal to Overhaul the Federal Income Tax System – A Conversation with ChatGPT

Author: There is a debate regarding whether our current progressive income tax system unfairly targets high-earners. According to the Tax Foundation, individuals earning over $130,000 annually paid $3.23 trillion in taxes, while those who earn less than $25,000 paid $142 billion in taxes. Some propose implementing a flat tax as a solution to this issue, while others support a federal consumption tax. What are your thoughts on the current state of our income tax system?

 ChatGPT: My opinion on the current state of our income tax system is that it needs to be reformed in order to better reflect the economic reality of modern society. The progressive tax structure we currently have in place works well for those with lower incomes, but it can become overly burdensome for those earning higher wages. A flat tax or a federal consumption tax could help address this issue by providing more equitable taxation across all income levels. Ultimately, any reforms must ensure that everyone pays their fair share while also providing enough resources to fund essential government services.

 

Smoothing the Rate Curve

Author: There are currently seven federal income tax brackets, each with its own rate ranging from 10% to 37% (specifically, 10%, 12%, 22%, 24%, 32%, 35%, and 37%). However, there is a significant jump in the tax rate from the lower end to the middle, going from 12% to 22%. This puts middle-income earners at a disadvantage, as they are penalized for not having a tax bracket and rate (e.g., 18%) in between. Despite this, there seem to be more complaints from high-earners about their taxes, while the plight of middle earners is often overlooked. Can you shed some light on why this is the case?

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