The US tax system is composed of so many different taxes: FICA, Income Tax, Medicare, cigarette, gasoline, unemployment, AMT, etc. I'm sure that just scratches the surface.
The reason why we have so many taxes is that everytime Congress creates a new program, they have to create a tax to pay for it.
Simplify! Develop a small number of taxes. Income, Sales, VAT, whatever. Then adjust the rates on those taxes to pay for the programs.
The current litany of taxes on payroll are a huge problem. An employer is faced with so many reporting and withholding requirements that they are reticent to hire employees. They also end up being regressive instead of progressive.
The combination of a tax on consumption (preferably on both goods and services) plus a much simplified income tax should be designed to generate the needed income.
The only payroll tax, other than income, should be an employer paid tax that is based on what benefits the employer provides. The theory being, if the employer does not provide the benefit, then the government will have to. The employer could pay a tax that ranges, say from 0-10%. Offer health insurance, pay less tax. Pay a living wage, pay a lower payroll tax. Employ people only part time with no benefits, pay more tax.
Comments (7)
Who keeps raising the price of cigarettes? Its got to stop. Poor people suffer because they smoke more.
Now gasoline, that another thing.
And while I'm at it - does the President still smoke?
And how many members of Congress smoke?..Let's have some transparency around this issue or quit growing tobacco.
Thanks for letting me rant, afterall its only brainstorming, right?
The US tax code is so archaic and should be changed to be fair for all. There is so much demographic data now and financial data now to simplify the tax code to 10% of what it is now. When ever you patch something over and over again the ramifications are never known for a long time, eg. AMT. A complete rewrite should occur probably led by some smart business person rather than a tax lawyer.
What has this to do with open government?
sorry to say, but I found your proposal confusing (like the tax code you criticize.)
Tax simplification is sorely needed. I fear though that in the current political climate, the burden would be shifted away from those who can afford to pay and onto those who can't, as seems to happen every single time the government needs to pay for something nowadays.
I find myself agreeing with Francis S again. While the tax code is complicated, most of the taxes were put in there for specific reasons. FICA collections are a good example. This was designed so that employees and employers can't shirk on paying the tax.
My suggestion is to "start" simplifying the tax code. We can start by getting rid of deductions for horse farming. Read the tax code, there are tons of "horse" related benefits. Ever wonder why the very wealthy all have horses? I say this tongue in cheek but it's the kind of stuff that will knock a hundred pages out of the tax code an only upset a minority (albeit a powerful minority) of the population.
Again-this is on the right track, it just has to be well thought out and planned.
Most taxes including VAT, Fair tax are not fair taxes at all, sounds more like pay off money to the mob. Two people trade something to help each other then a third party says they have to help him or he will hurt them. Not very fair I would say. I would have a resource tax. I would tax people on the resources thay use up, destroyed, or any thay keep for thier private use. The resources of the earth should be shared by all and if someone use up, destroyed, or keep any for just thier private use thay should pay the rest of us for those resources through a resource tax that can be use to pay for a fair government that helps everyone and any money left over can be rebated back to the rest of us. Since the rich use the most resources thay would pay the highest taxes. If you reclaimed resources you can get a tax credit, like cleaning up a river or recyling trash.