I propose that all of our tax laws and tax codes be scraped and replaced with a simple flat tax system. In this system it would not matter how you earned your money or from what source, you would be taxed at the same flat percentage for every single dollar of income. No longer would we need loopholes, tax accountants, tax lawyers, or nearly as many IRS agents as we now have. You make a Dollar, you pay a flat percentage of tax. While I don't have the figures available to do an accurate calculation, my assumption is that the true tax rate would be somewhere in the neighborhood of 2 percent to 5 percent and EVERYONE would pay. Remember, under this plan/idea you would pay on every dollar RECEIVED and would no longer track expenses (for tax purposes). For businesses, expenses would be tracked only as a means of determining profitability NOT for Tax purposes.
This is the simplest, fairest and most straightforward method of taxation.
Comments (4)
I would agree to a flat tax if the lowest income group were excluded (which they are now). If the lower income group had to begin to pay taxes they could not even afford the basics necessary for life.
As soon as we start excluding one group of people from the Flat Tax Rate then we are headed back to the complicated, burdensome tax system we have today fraught with loopholes and exemptions. If a minimum wage earner (currently $6.55 per hour going to $7.25 per hour July 24, 2009) earns $13,624 per year (40 hours per week times 52 weeks = 2,080 hours per year) then their Flat Tax would be $272.48 at the 2.0% Flat Tax Rate. Now that doesn't seem to be an exorbitant amount to pay for all that the government does. No group and no income should be excluded from the "Flat Tax Rate" regardless of the source of that income. As soon as we exclude this group, or that type of income, or start subtracting these expenses from the "taxable" income then we go right back to what we have. Right now we have about 45% of the citizens NOT paying ANY tax and the other 55% of us are footing the bill. Sooner or later we (the 55% who ARE paying Taxes) will say enough is enough and stop.
You might want to consider a sales tax instead of a flat income tax. Income tax has huge problems--to the point of threatening the sovereignty of another nation (Switzerland). A sales tax is much less expensive for government to collect--saves a lot of money right there. Also, a sales tax promotes saving: all saving is 100% of income. For those who really want a progressive tax, you can debate the details of a prebate or such, but the sales tax is worlds better than an income tax for many reasons.
The old tax system of taxing at an increased rate those that unfairly manipulate more than their fair "unearned" share of profit was a good way or redistribution of wealth. There is no way that any individual can earn a million dollars over a 12 month period. It is unfair that such manipulations are allowed, when the folks that do the actual work and thinking to get a job done "earn" much less. Taxing the excess is a fair way to justly help in leveling the field.