A flat tax is a tax system with a constant marginal rate applied to individual or corporate income. A true flat tax would be a proportional tax, but implementations are progressive and sometimes regressive depending on deductions and exemptions in the tax base. There are various tax systems that are labeled "flat tax" though they are different. Flat tax proposals differ in. A true flat-rate tax is a system of taxation where one tax rate is applied to all personal income with no deductions. Where deductions are allowed, a'flat tax' is a progressive tax with the special characteristic that, above the maximum deduction, the marginal rate on all further income is constant; such a tax is said to be marginally flat above that point. The difference between a true flat tax and a marginally flat tax can be reconciled by recognizing that the latter excludes certain types of income from being defined as taxable income. Modified flat taxes have been proposed which would allow deductions for a few items, while still eliminating the vast majority of existing deductions.
Charitable deductions and home mortgage interest are the most discussed examples of deductions that would be retained, as these deductions are popular with voters and are used. Another common theme is a single, fixed deduction; this large fixed deduction would compensate for the elimination of various existing deductions and would simplify taxes, having the side-effect that many households will not have to file tax returns. Designed by economists at the Hoover Institution, Hall–Rabushka is a flat tax on consumption. Principally, Hall–Rabushka accomplishes a consumption tax effect by taxing income and excluding investment. Robert Hall and Alvin Rabushka have consulted extensively in designing the flat tax systems in Eastern Europe; the negative income tax, which Milton Friedman proposed in his 1962 book Capitalism and Freedom, is a type of flat tax. The basic idea is the same as a flat tax with personal deductions, except that when deductions exceed income, the taxable income is allowed to become negative rather than being set to zero.
The flat tax rate is applied to the resulting "negative income," resulting in a "negative income tax" that the government would owe to the household—unlike the usual "positive" income tax, which the household owes the government. For example, let the flat rate be 20%, let the deductions be $20,000 per adult and $7,000 per dependent. Under such a system, a family of four making $54,000 a year would owe no tax. A family of four making $74,000 a year would owe tax amounting to 0.20 × = $4,000, as would be the case under a flat tax system with deductions. Families of four earning less than $54,000 per year, would experience a "negative" amount of tax. For example, if the family earned $34,000 a year, it would receive a check for $4,000; the NIT is intended to replace not just the USA's income tax, but many benefits low income American households receive, such as food stamps and Medicaid. The NIT is designed to avoid the welfare trap—effective high marginal tax rates arising from the rules reducing benefits as market income rises.
An objection to the NIT is. Those who would owe negative tax would be receiving a form of welfare without having to make an effort to obtain employment. Another objection is that the NIT subsidizes industries employing low-cost labor, but this objection can be made against current systems of benefits for the working poor. A capped flat tax is one in which income is taxed at a flat rate until a specified cap amount is reached. For example, the United States Federal Insurance Contributions Act tax is 6.2% of gross compensation up to a limit. This cap has the effect of turning a nominally flat tax into a regressive tax. In devising a flat tax system, several recurring issues must be enumerated, principally with deductions and the identification of when money is earned. Since a central tenet of the flat tax is to minimize the compartmentalization of incomes into myriad special or sheltered cases, a vexing problem is deciding when income occurs; this is demonstrated by the taxation of interest stock dividends.
The shareholders own the company and so the company's profits belong to them. If a company is taxed on its profits the funds paid out as dividends have been taxed. It's a debatable question if they should subsequently be treated as income to the shareholders and thus subject to further tax. A similar issue arises in deciding if interest paid on loans should be deductible from the taxable income since that interest is in-turn taxed as income to the loan provider. There is no universally agreed answer to. For example, in the United States, dividends are not deductible but mortgage interest is deductible, thus a Flat Tax proposal is not defined until it differentiates new untaxed income from a pass-through of taxed income. Taxes, in addition to providing revenue, can be potent instruments of policy. For example, it is common for governments to encourage social policy such as home insulation or low income housing with tax credits rather than constituting a ministry to implement these policies. In a flat tax system with limited deductions such policy administration, mechanisms are curtailed.
In addition to social policy, flat taxes can remove tools for adjusting economic policy as well. For example, in the United States, short-term capital gains are taxed at a high
The American Homebuilts John Doe is an American STOL homebuilt aircraft, designed by Steve Nusbaum and produced by American Homebuilts of Hebron, first flown in 1994. When it was available the aircraft was supplied as a kit for amateur construction; the aircraft was given its name because the designer and his wife, Carla Nusbaum, could not decide on an appropriate name for the design. The John Doe features a strut-braced high-wing, a two-seats-in-tandem enclosed cabin, fixed conventional landing gear and a single engine in tractor configuration; the aircraft is made from welded steel tubing, with its flying surfaces covered in doped aircraft fabric. Its 30.6 ft span wing mounts flaps, leading edge slats, drooping ailerons, stall fences and has a wing area of 130.6 sq ft. It employs a NACA 4415 airfoil; the acceptable power range is 65 to 125 hp and the standard engines used are the 125 hp Continental IO-240 and 100 hp Continental O-200 powerplants. The aircraft has a typical empty weight of 878 lb and a gross weight of 1,400 lb, giving a useful load of 522 lb.
With full fuel of 26 U. S. gallons the payload for the pilot and baggage is 366 lb. The standard day, sea level, no wind, take off with a 125 hp engine is 150 ft and the landing roll is 250 ft; the manufacturer estimated the construction time from the supplied kit as 400 hours. By 1998 the company was flying. By December 2007 a total of three had been completed. In April 2015 one example was registered in the United States with the Federal Aviation Administration, although a total of three had been registered at one time. Data from AeroCrafter, All-Aero and EAA ExperimenterGeneral characteristics Crew: one Capacity: one passenger Length: 20.8 ft Wingspan: 30.6 ft Height: 6.5 ft Wing area: 130.6 sq ft Aspect ratio: 7.2:1 Airfoil: NACA 4415 Empty weight: 878 lb Gross weight: 1,400 lb Fuel capacity: 26 U. S. gallons Powerplant: 1 × Lycoming O-235 four cylinder, air-cooled, four stroke aircraft engine, 108 hp Propellers: 2-bladed metal, fixed pitchPerformance Maximum speed: 140 mph Cruise speed: 117 mph Stall speed: 30 mph flaps down Range: 370 mi Service ceiling: 13,000 ft Rate of climb: 1,100 ft/min Wing loading: 10.7 lb/sq ft Photo of a John Doe
The FBI–Apple encryption dispute concerns whether and to what extent courts in the United States can compel manufacturers to assist in unlocking cell phones whose data are cryptographically protected. There is much debate over public access to strong encryption. In 2015 and 2016, Apple Inc. received and objected to or challenged at least 11 orders issued by United States district courts under the All Writs Act of 1789. Most of these seek to compel Apple "to use its existing capabilities to extract data like contacts and calls from locked iPhones running on operating systems iOS 7 and older" in order to assist in criminal investigations and prosecutions. A few requests, involve phones with more extensive security protections, which Apple has no current ability to break; these orders would compel Apple to write new software that would let the government bypass these devices' security and unlock the phones. The most well-known instance of the latter category was a February 2016 court case in the United States District Court for the Central District of California.
The Federal Bureau of Investigation wanted Apple to create and electronically sign new software that would enable the FBI to unlock a work-issued iPhone 5C it recovered from one of the shooters who, in a December 2015 terrorist attack in San Bernardino, killed 14 people and injured 22. The two attackers died in a shootout with police, having first destroyed their personal phones; the work phone was recovered intact but was locked with a four-digit password and was set to eliminate all its data after ten failed password attempts. Apple declined to create the software, a hearing was scheduled for March 22. However, a day before the hearing was supposed to happen, the government obtained a delay, saying they had found a third party able to assist in unlocking the iPhone and, on March 28, it announced that the FBI had unlocked the iPhone and withdrew its request. In March 2018, the Los Angeles Times reported "the FBI found that Farook's phone had information only about work and revealed nothing about the plot."In another case in Brooklyn, a magistrate judge ruled that the All Writs Act could not be used to compel Apple to unlock an iPhone.
The government appealed the ruling, but dropped the case on April 22 after it was given the correct passcode. In 1993, the National Security Agency introduced the Clipper chip, an encryption device with an acknowledged backdoor for government access, that NSA proposed be used for phone encryption; the proposal touched off a public debate, known as the Crypto Wars, the Clipper chip was never adopted. It was revealed as a part of the 2013 mass surveillance disclosures by Edward Snowden that the NSA and the British Government Communications Headquarters had access to the user data in iPhones, BlackBerry, Android phones and could read all smartphone information, including SMS, location and notes; as well, the leak stated that Apple had been a part of the government's surveillance program since 2012, Apple per their spokesman at the time, "had never heard of it". According to The New York Times, Apple developed new encryption methods for its iOS operating system, versions 8 and "so deep that Apple could no longer comply with government warrants asking for customer information to be extracted from devices."
Throughout 2015, prosecutors advocated for the U. S. government to be able to compel decryption of iPhone contents. In September 2015, Apple released a white paper detailing the security measures in its then-new iOS 9 operating system; the iPhone 5C model can be protected by a four-digit PIN code. After more than ten incorrect attempts to unlock the phone with the wrong PIN, the contents of the phone will be rendered inaccessible by erasing the AES encryption key that protects its stored data. According to the Apple white paper, iOS includes a Device Firmware Upgrade mode, that "estoring a device after it enters DFU mode returns it to a known good state with the certainty that only unmodified Apple-signed code is present." The FBI recovered an Apple iPhone 5C—owned by the San Bernardino County, California government—that had been issued to its employee, Syed Rizwan Farook, one of the shooters involved in the December 2015 San Bernardino attack. The attack killed 14 people and injured 22; the two attackers died four hours after the attack in a shootout with police, having destroyed their personal phones.
Authorities were able to recover Farook's work phone, but could not unlock its four-digit passcode, the phone was programmed to automatically delete all its data after ten failed password attempts. On February 9, 2016, the FBI announced that it was unable to unlock the county-owned phone it recovered, due to its advanced security features, including encryption of user data; the FBI first asked the National Security Agency to break into the phone, but they were unable to since they only had knowledge of breaking into other devices that are used by criminals, not iPhones. As a result, the FBI asked Apple Inc. to create a new version of the phone's iOS operating system that could be installed and run in the phone's random access memory to disable certain security features that Apple refers to as "GovtOS". Apple declined due to its policy which required it to never undermine the security features of its products; the FBI responded by applying to a United States magistrate judge, Sheri Pym, to issue a court order, mandating Apple to create and provide the requested software.
The order was not a subpoena, but rather was issued under the All Writs Act of 1789. The court order, called In the Matter of the Search of an Apple iPhone Seized During the Execution of a Search Warrant on a Black Lexus IS300, California License Plate 35KGD203, w