THE NATIONAL CONSTITUTION PROTOTYPE PROJECT
Building a solid foundation for long-term national success.
Taxes on Wages
Ideally, the income tax rate for the vast majority of wage earners should be the same. Any graduation of tax rates should occur only for those at the most extreme end of the wage curve (e.g., the top 2 percent of wages). The tax rate for the vast majority of wage earners should be fixed over the long term.
A flat tax on wages is ideal because of its impact on job formation. That is because steeply graduated taxes bias an economy to create low-wage, low-productivity jobs rather than higher paying, higher productivity jobs.
Note that, when viewed from an employer's perspective, one gets more "bang for the buck" when the government takes a smaller share of the money one has to spend on wages.