Starting tomorrow everyone is happy. The Obama Tax Increases didn’t happen – at least for 2 years. That’s all we bought after monumental debate and historic legislation heralded as bipartisan cooperation~ finally, on Obama’s part.
You can still hear the griping though from those who say the wealthy pay too little, when in fact according to Business Insider, the top 10 percent of earners pay about 71 percent of all the income taxes collected. And our current tax system exempts almost half the country from paying for programs that benefit everyone like national defense, public safety, infrastructure and education. That’s right, 47% pay no federal income tax at all.
But to be fair even those who escape federal income taxes still pay a heap other taxes, including federal payroll taxes for Social Security and Medicare, and excise taxes on gasoline, aviation, alcohol and cigarettes. Many also pay state or local taxes on sales, income and property.
So we’ve got 2 years gang to push from the bottom up for tax reform. Otherwise you’re gonna see a repeat of all the class warfare, special tax deals for special friends of politicians, union vote for tax credits to certain groups and special treatment, etc., etc.
Bottom line, we as a nation spend too much time and money trying to either comply with or avoid taxes. It’s a mega-productivity drain. So let’s look at 5 simple but radical ideas from Kevin Boyd of Liberty United to reform our tax code.
1) Create a simple, two-bracket tax system with only three deductions: 8% on the first $25,000, and 14% on the rest. The only deductions: a $6,000 standard deduction ($12,000 for married couples), a $4,000 exemption for dependents who don’t file their own tax returns, and all taxpayers would be able to claim charitable contributions up to 35% of adjusted gross income. Period –no other deductions.
2) Create a minimum tax in order to reduce non-paying filers. There should be a minimum tax that everyone pays. Get some skin in the game and suddenly you’re more cognizant of where our tax money goes.
3) Reduce the corporate tax rate to 15%. It’s currently 35% so you’d see businesses and jobs come back to the US and competition would soar.
4) Abolish the capital gains tax and taxes on savings. This would free up capital, funding expansion and encourage people to save more.
5) End withholding. Americans don’t know how much they really pay in taxes. If we had to write the checks directly to the IRS quarterly, we would have tax and entitlement reform immediately!