Posted on 03/04/2015 9:13:36 AM PST by SeekAndFind
I know that a lot of tax reform hawks were hoping for more of a complete overhaul, perhaps taking the form of an entirely new system which replaces the progressive tax code with a completely alternate structure. (Something along the lines of a flat tax, consumption tax, etc.) It doesn’t look like that will be happening any time soon, but Marco Rubio and Mike Lee are at least looking at some simplifications.
GOP Sens. Marco Rubio of Florida and Mike Lee of Utah are rolling out an overhaul of the tax code on Wednesday that, among other things, consolidates existing tax brackets and provides for a per-child credit for parents.
The two Republicans offered a preview of their plan in a Wall Street Journal piece, writing that restoring shared prosperity that comes with a strong economy “requires reforming the most antiquated and dysfunctional government policies, beginning with the federal tax system.”
Their plan would lower the maximum corporate tax rate to 25 percent on both corporate and pass-through entities, eliminate “double taxation” of capital gains and require firms with overseas operations to be taxed only in the country where income is earned.
On the individual filing side, the plan would consolidate the seven existing brackets into two groups — 15 percent and 35 percent — and make remaining deductions available to all filers.
We’ll need to see the full plan and have some time to dig through it, but at most I would call this “a good start.” There are some important flaws in the current system which would be addressed by this – at least to a point – but others which won’t be touched. We could start with the corporate tax rate, which is clearly too high on paper, but at 25% would still be too high if business were actually paying it. (Almost none do, of course.) The encyclopedia size corporate tax laws allow for so many dodges and deductions that the amount you pay largely depends on how large of an army of high power tax attorneys you can afford. I’ve been an advocate for a long time now of just instituting a flat 10% corporate tax rate on all profits above some minimum threshold based on either the number of employees or gross revenue. Just calculate what you took in, subtract what you spent, and if the difference is a positive number you send in a check for 10% of that.
I have no problem with two tax rates instead of seven for individual and family filers, though the 35% bracket seems a bit high. What I’m more curious about are the piles of deductions and credits which complicate the returns. Eliminating the marriage penalty is a popular idea, but removing “marriage” from the tax code entirely and just focusing on the number of children being raised would be simpler and more fair.
As far as the capital gains tax goes, I don’t see why we’re still debating a number. There should be no capital gains tax, period, full stop. It’s double taxation by definition in most cases and really just translates into an age old liberal tradition of saying, you made too much money at one time for us to be comfortable, even though you did risk your assets to do it, so we’re going to take a big cut out of it.
I’ll give Rubio and Lee credit for trying, assuming that they can get something like this to the floor for serious consideration. We could do a lot more, but at least it’s a start. Unfortunately, I don’t expect it to fly. There are too many people who have invested far too heavily in the careers of these politicians based on assurances that they would all keep their individual slice of the pie.
How about deleting the IRS, or reducing it to a shadow of its former self in favor of a flat tax?
After the last few years, even people I know have been audited after going to a tea party meeting... I’m not interested in nibbling around the edges of the tax code.
RE: How about deleting the IRS, or reducing it to a shadow of its former self in favor of a flat tax?
One step at a time. First, win the battles and then we can win the war.
It took us several generations to get to an IRS. It will probably take that same amount of time to get rid of it.
Until Obama and his IRS buddies decide they can do whatever they want.
The war was lost yesterday when congress voted to give Obama unlimited power.
35% percent tax is too much and what is the salary associated with that? They should have left the rates Bush had in place.
Exactly. I don’t believe anything coming from the house or Senate or whatever. They are all liars.
This would be a tax increase of 9.5% for me. Medicare persons cannot afford this kind of tax increase. How about ending the tax’s of 85% on SS income. Then I would except the 15% tax bracket.
Should just do a lump sum amount, $5,000 say for everyone of age, inflation adjusted. If you can’t pay it you can’t vote. No need for IRS since income is irrelevant and everyone truly does pay their fair share, and those who don’t can’t vote.
If we don’t go after them after seeing how they have become politicized, then we will never do it.
Similar to BLM, Wildlife, EPA. If we don’t do something after seeing the kinds of abuses they are capable of, we will never do it at all. But we need to.
It did? From wiki =>
In the first year after ratification of the Sixteenth Amendment, no taxes were collected—instead, taxpayers simply completed the form and the IRS checked it for accuracy. The IRS's workload jumped by ten-fold, triggering a massive restructuring. Professional tax collectors began to replace a system of "patronage" appointments. The IRS doubled its staff, but was still processing 1917 returns in 1919.
It will probably take that same amount of time to get rid of it.
The problem with simplification is that the next Congress comes along and unsimplifies it. Lather , rinse, repeat.
http://www.Fairtax.org lays out a plan a hell of a lot closer to what the Founders had in mind. It COULD serve as a way station BACK
to the system called for in the Constitution.
Heck, it could even lead to a return to honest, Constitutional “money”.
I’m not interested in anything this government is trying to sell.
And they can get their funds from their illegal alien citizens now, I have no representation.
Rand Paul says he is submitting a bill for tax reform that will get the IRS out of your life. So I’ll be curious to see what that is. Any tax reform plan that does not get rid of the IRS is worthless.
So are you saying that if I decide that the honor of voting for the morons running for Congress isn't worth $5000 a year then I don't have to pay taxes? How do you propose to run the government on the few thousand dollars you'd collect?
Everyone wants to cut taxes and nobody wants to cut spending. Everyone is a deficit hawk...so long as the other party is in the majority.
I like the idea of a citizenship fee as well. Your $5000 figure raises about 1 Trillion if everyone pays it. The current budget is 3.5 trillion and I’m OK with a couple trillion cut to that. Things like SS and Medicare should be handled privately. States can make up the differnce in all the other prorgams and waste if they are dumb enough to try Socialism and their state constitutions allow it.
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