10% flat tax on all income - corporate, dividend, personal income. No deductions.
Forgetting the main reason the tax code will not be simplified: Jobs.
How many accountants and tax preparers would be out of work if a flat tax ever went into effect? Do you seriously think they don’t lobby against a simpler tax code?
Hence why I now think we need to go to a national retail sales tax.
It would capture more of the underground economy, it would tax imported goods the same as US-made goods, and it would provide more direct economic data on how the economy is doing.
It only 'costs' the government money if you believe in static models and assume that all money is the government's, and we are lucky to keep some of it.
What I really want them to do is STOP SPENDING, DAMMIT! And NOT perpetually trying to figure out ways to get more tax revenue out of the few remaining productive citizens.
Simple...now that the government forces you to provide insurance for employees if you have more than 50, there is no need to use the federal tax code as an incentive for you to do so...so get rid of the tax write off for insurance coverage.
Since the government is going to take care of all your needs there will be no need to donate to charity - so there goes the charity deduction.
They will eliminate the tax deduction for the pension plans AND find a way to tax the gains made within those plans before withdrawal ! Plus likely place a 20% across the board tax on the current value to capture all the ill-gotten gains that weren’t taxed previously.
Mortgage deductions will be capped at some ridiculous amount to “punish” the high earners who have “too expensive” houses. They will also eliminate the mortgage deduction on second homes, because in their utopian society NO ONE needs too houses - and if they do have 2 they should be punished tax-wise.
All monies earned belong to the government anyway - just be glad they “let” you keep a little of what your labor produces - pretty soon John Kerry won’t be able to deduct this yacht maintenance - oh wait, they will exclude themselves from the legislation, just like the Obama-case fiasco.
I think that this is indeed one of the objectives of Obamacare to make coverage mandatory then eliminate the deduction.
Make everyone pay something.
If you have income of 50k, after taxes that’s about 32k. Multiply it by 2, divide it by 4 then subtract 16 on form I-B-Stupid. Be sure to check the box marked dumdum, then sign under penalty of perjury.
All the above.
Fix it (flat tax) - don’t just tinker with it.
It says that these “tax expenditures” “cost” the government. That language drives me nuts. First they steal our wealth from us, then give us small breaks so we can keep a little bit of the wealth that WE earned is a “cost” to the government or somehow letting us keep a little bit of OUR money is a “tax expenditure” for the government. Only in BizzaroWorld.
Get rid of the income tax and go with a 20% ish consumption tax with some modest exempt amount of spending sent via quarterly checks to each tax payer.
This exempt amount needs to be modest to avoid the issues we have not with so few paying income taxes.
Corporations do not pay taxes, they pass them on.
A no-deduction flat tax has much to commend it (provided “income” is analogous to profit not revenue), but I’m not sure you can get there from here politically.
Romney’s much ignored suggestion of capping deductions and credits has much to commend it both politically — it doesn’t eliminate any deduction or credit that has as — and in terms of increasing the tax base — it encourages maximally productive use of capital in place of tax avoidance as the main consideration in investment. On the other hand, it was both too draconian (his $25K suggestion was too low and including charitable contributions in the capped deductions goes a long way toward destroying the non-state civil society) and not radical enough: what should be capped is the aggregate amount of income (understood as after expenses of producing income) which can be shielded from taxation at normal rates by any means other than charitable contributions.
That would mean fixing a cap, say $100K per individual not claimable as a dependent and say $50K for those claimable as dependents, and adding together the exemptions, all deductions other than cost-of-producing-income and charitable deductions, all income from tax exempt sources, the amounts of all tax credits divided by the taxpayer’s top marginal rate, and the amount of all income taxed at lower rates times the difference in the lower rate and the normal rate, subtracting the cap and if the amount is positive adding it to the income before finding the tax. This scheme should replace the AMT (it does the same thing more effectively without catching the middle class in the net and, as you can see from my description would be shorter to file than the AMT).
In the sort run, if we could replace the AMT with what I just described, I’d be happy to let the marginal rate on incomes over $1M (for an individual and $2M for couples filing jointly) rise to the Clinton-era rate, so long as there were serious spending cuts in the current year and all out years included in the deal. (Alternatively, I’d settle for the abolition of baseline budgeting and the abolition of funding for government agencies to calculate the “baseline” together with one last round of the ephemeral “cuts” Washington has produced intermittently since baseline budgeting was introduced.)
Hmm... editing glitch there.
The first remark between dashes should have read
“it doesn’t eliminate any deduction or credit that has a substantial constituency”.
How about the Federal Gov’t just quits spending money for functions not authorized by the Constitution?
Bye bye Energy Prevention Agency, Dept. of Indoctrination, Dept. of Constricting Commerce, etc...
If government employee/contractor/vendor/welfare spending is not cut (welfare is almost equal to the entire deficit), then tax policy changes will not help anything.
If the changes result in less revenue, the deficit grows faster.
If the changes result in more revenue, it’s just spent anyway.
Back during Reagan’s terms, the relative size of government debt to Gross Domestict Product was about 40%. Now it’s over 100%. The prosperity boost that lower taxes provided to the economy back then was not overshadowed by a Federal government that was insolvent on such a grand scale as it is today.
IMHO, the only way out is radical reduction of goverernment agencies. Social Security and Medicare need not be affected at all to fix this, nor should they be for those at or close to retirement. For those younger than that, they should be given the option to not participate in the program and it should be phased out for younger citizens over decades.