U.S. Tax Code: The zenith of zany
The American tax code is unjust. Why? Because the prince outpays the pauper. I believe that. And any law with a million pages must be the zenith of zany.
Here’s the solution to both in less than a paragraph:
- Every person pays at a 90 percent rate for all types of income.
- There are six deductions:
- Every dollar spent in America is deductible; and so is:
- $20,000 per child in a savings account per year.
- $40,000 per person in annual retirement savings.
- $5,000 per person in charitable gifts.
- An additional $50,000 for every business owner/ farmer whose business is his primary source of income.
- An additional $10,000 per employee.
And that’s it. That’s the new tax code.
We all have the same rate (a flat tax) and we all have the same deductions (no loopholes.) Someone who wants more to ‘take home’ need only to spend faster or hire more workers.
Now, I don’t know if the exact numbers are right. Maybe the rate should be 95 percent; or 70 percent, I’ll leave that to economists. And maybe we need a higher or lower deduction for children and farmers. But those are just details.
Corporations, those which actually hire workers or produce a product, can have a simple code too. Every dollar they spend is essentially tax-free, and they profit by hiring Americans and investing in infrastructure.
Two groups will likely pay more than they do now:
- The overnight investor: the guy who uses money to make a quick buck in the markets (and other capital-gainers.) Long-term investors will see a slow but steady rise in the value of the company, and a steady yearly dividend
- The CEO/Movie star, someone who earns makes $20 million/year with few or no employees, will end up paying more in total dollars – but at the same rate as his maid. He can pay less, however, if he hires or spends more; it’s his choice.
Well, what do you think? Is there a reason this is unfair to either the rich or the poor? Would it stifle growth; or investment; or job creation; or not be a ‘rising tide that lifts all boats?’
The first argument against it may be: The rich still pay more, while the poor still pay nothing. Aha! Good argument, Sir. Touché!
You’ll have to ask yourself: Do I oppose current higher taxes on the rich because everyone should pay the same rate? If you answer “yes,” then this plan is for you. My rate is the same for every American, and each of us gets the same deductions. It doesn’t get more even-Steven than that. Does it?
Or, you may argue something about spending and blah, blah, blah. That’s not relevant to the tax code so don’t bother. I agree that spending is out of control, but even if we loved how our budget was disbursed we’d still have to pony up. This proposal only covers HOW we pony up – if ‘pony up’ is still an expression.
In any event, would my one paragraph tax code be an equitable way to pay for whatever it is we decide to pay for?