The topic of this post is as simple as it is controvertial. Taxes. Everyone hates them, no one wants them, and everyone has ideas on who and how much. The problem as I see it is that the tax code is neither fair, equal, or straight forward enough. Allow me to address these issues.
First we'll tackle equal. Is it fair that the more you make the higher the percentage you are required to make? I didn't say higher amount, I said percentage. This is where there are large problems. As I see it, making more shouldn't mean that you pay a higher percentage. The percentage should remain unchanged. By doing this the taxes will be equal for all. No one can argue that it isn't equal if we all pay the same percentage. Yes, if you make more money you pay more money in taxes, but 10 cents on the dollar is 10 cents on the dollar regaurdless of the number of dollars you have. It is true that if you make $1,000,000 you will pay $100,000 in taxes. But you still have $900,000 to play with, not to many families I know of make a quarter of that and live just fine, well even. Thus, regaurdles of amount made, a flat 10% is equal.
Second, we'll tackle fair. How is it fair that, even though a multi millionaire is in a 50% tax bracker, he actually pays less than 10% in taxes? The fact is, that once you reach a certain income level, you can afford the right lawyers to find enough tax loop holes and deductables to reduce your income to the point where you essentially are not considered rich. The only way a flat tax can ever work is if we eliminate all deductions and tax breaks. Sure, on paper you pay a higher percentage in taxes the richer you are, but this is only true until you reach that magical point where paying for a tax lawyer and accountant pays for itself in keeping your tax levels low enough. If I pay for H&R block to do my taxes, I actually lose money. Thye would charge me about $80 and the last time I use them they only found me $50 that I hadn't been able to find, thus I lost $30. Taxes should be fair enough that you can't reduce what you pay by hiring a lawyer. But this also falls under the straight forward enough category which is next.
Finally, we need a tax code that is Straight forward. This means that all you need to do your taxes is basic math. In order to do your taxes now, you almost need a law degree. The complexity of the tax code is such that, without a computer program, a lawyer, or and accountant, you would never be able to file your taxes properly. You would either miss a deduction or you would claim one for which you didn't qualify without them. If you don't believe me, take a look at what is out there. H&R Block, Taxbusters, Taxcut, etc. none of these would exist without a complex taxcode that people couldn't follow. Why should the government give refunds? How hard does it have to be to figure out how much you owe in taxes every year? If you can't figure out how much you owe for your taxes each paycheck, how can we be expected to withhold the right amount? The complexity of the tax code by itself is enough to be a drain on the nation. If we are so concerned with the national budget, maybe we ought to look at where the money is coming from.
There is a solution to all of this. I have hinted at it (if I haven't come right out and said it). It's a flat income tax. a percentage straight accross all pay levels. No deductions, no credits, no incentives, just a straight percentage. I did the math a while ago. I found the lowest average income per household in the US that I could find on the internet (it was $39,000 and change so I rounded it to $40,000 for simplicity)(the overall average for the numbers was about $62,000). Multiplied it by the population of the US as of the last census (308,000,000 people). Multiplied that result by 10%. The reult was just over $1.2 TRILLION dollars. For clarification, every average was based on total reported pay divided by total population. I can already hear some of you saying what about the poor, they can't afford to eat and you want them to pay $10 to the government? I thought of that and realized that if we don't ask them to pay, then we shouldn't give them food stamps and welfare. There can be no exceptions. If your income is such that you need food stamps etc. to live, then you need your tax return to prove it. The systems are in place to aid you and you will still get them. If the military (who recieves 100% of their pay from the government) pays taxes, so should anyone who recieves anything from the government.
I don't mean to come accross as an uncaring hardliner. The fact is, if a flat 10% tax rate were invoked, I would be one of those who paid more in taxes. In fact, for the last few years I have been one of those who got more back than I put in. After all of my deductions, I owed no taxes. On top of that, I was eligable for several credits. Thus I recieved a tax return for more than my withholding. I am willing to pay 10% of my pay for an equal, fair, and simple tax system. How about you?
No comments:
Post a Comment