Revising Current Income Tax System
Revising current income tax system
There have been discussions about our current income tax system. The liberals want to increase taxes on the "rich". Conservatives have talked about a flat tax or national sales tax.
The question is "what is the most fair way to tax the American public?" The liberals think the "rich" should pay more taxes. I personally have 2 problems with this. First the top 1% of wage earners are all ready paying more than their share of taxes. You can find a chart at http://newsburglar.com/2008/10/28/average-federal-tax-rates-by-income-percentile/ that tells you as of 2006 how much each wage group was paying. The top 1% was paying 39.89% of the taxes. If you earned $388,806 per year, you were in the top 1%. The second problem is while President Obama was campaigning, he said anyone making over $250,000 would be considered "rich". I don't think it is right for someone to set an amount to determine who is "rich" and who isn't. Who knows, the next President or Congress may decide $50,000 is "rich".
Before all of you liberals get upset, I realize that the current system increases rates based on your income. It currently has $388,806 as the top tax bracket. I also have a problem with the current system, which is why I am writing this article.
As recently as last week, I thought the flat tax was the way to go. Simply set a rate around 15% and give standard deductions of $10,000 for head of household, $10,000 for spouse and $5,000 for each dependent. Give a deduction for mortgage interest and also deduct charitable contributions.
I think the "fair tax" or national sales tax is the best solution. First we should PERMANENTLY eliminate the income tax and permanently set a national sales tax rate. I don't know what this rate would be, but it should be fairly reasonable like 10% or less. Food and medicine should be tax free. We could reduce the size of the IRS since they will no longer be auditing individuals. They could focus on simply auditing businesses which should help keep businesses from properly charging and paying the tax.
The national sales tax would tax those with higher incomes simply because they will be spending more money. Two problems with the current system is that people find loopholes, the more money you have the more loopholes you seem to be able to find. With the national sales tax, wealthy people won't have to hide their money or find loopholes. You also wouldn't have any debate as to whether something is considered income. Another big advantage of the national sales tax is that all of the illegal aliens will be paying tax. Since the Democrats don't want to deport the illegals and the Republicans are afraid of the Democrats, it looks like the illegal aliens are here to stay. At least a national sales tax will force them to pay some taxes.
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Comments
Well, I'm a liberal and I would like a flat tax or VAT. I think it can be done so as not to harm low income folks if you exempt necessities - food in grocery stores, used cars under a certain price (adjusted for inflation of course), rent/mortgage payments under some threshold.
But, btw, we don't see it as asking the rich to pay more. We see it as asking everyone to pay more and then adjusting it so the poorer folks pay less. Funny how just looking at things a little differently changes the whole argument.
I'm in favor of the flat or VAT because, properly done, it WOULD extract more from the wealthy. You buy a yacht or your third vacation home, yeah, you should be paying. Invest your wealth in creating new jobs, no, you don't. Self correcting if we do it right.
- AUTHOR
Thanks for the comment.
I thought that I was the only one that liked the National Sales Tax Idea.
I agree
I dn't like the flat tax because it can always be changed.
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