This one is long overdue. The tax system in our country is complex, costly and places an undue burden on the average citizen. The 1% and perhaps the top 5% do not share this burden because they can hire professionals to navigate the 70K pages of our tax system and leverage available loopholes to minimize the tax owed. To say the system is unfair and advantages the rich is just too easy. It's not that I am against the rich, quite the opposite. Our country was founded on taking risk, working hard, being innovative and "going for it". It's a country whose culture was based on "earning it". Sadly that last sentence is written in past tense because we are shifting to a country where too many people have stopped going for it, stopped earning it and now just expect it. Sad.
Let's get back to taxes. First, a confession, I am no expert on this topic, just a guy with an opinion. Secondly, I researched various proposals from presidential campaigns, some have details while others offer platitudes. Then I had a few beers and thought long and hard about the best path forward. I like Rand Paul's proposal which he calls "The Fair and Flat Tax". But ... and it's an important but ... with a twist.
You see, Rand wants to blow up those 70K tax pages and start over. He does not want to "change" or "adapt" the existing tax model. He wants to blow it to smithereens! That sounds like a great first step. His proposal is a flat 14.5% tax on individual and business income and elimination of all deductions except mortgage and charity (I believe). He would eliminate payroll taxes too.
Many others have proposed a flat tax and they differ by one thing or another. I like Rand's idea of just starting over with a very simple method. It's fair, simple and does not leave room for shenanigans by expensive accountants and lawyers. I am not tied down to the 14.5% number. If it needs to be 15% ok fine.
Now let's get to the twist. The one thing I don't like about the "Fair and Flat Tax" is the rich pay the same rate as anyone making more than $50K - for a family of four (below $50K there is no tax which seems right). That I don't like. You see, the rich people that I know and read about don't really mind if they pay a bit more. They don't mind if the tax percentage is graduated or progressive to some degree. They just want it to be simple, straightforward, and predictable. So, let's make up a few numbers. How about income above $1M pays another 5% in taxes, or 19.5% above $1M. That doesn't sound so bad. How about income above $5M we tack on another 5%. And that's it. We can use these extra monies from the $1M and $5M steps to help fund social security or medicare or bridges and roads. Whatever is needed. The rich pay a bit more which they are ok doing and the poor and middle class get a bit of a break. Most important, we drastically simplify a wasteful and complex system that is confusing and unfair.
Phew. This political stuff isn't all that hard. We just need to listen to some smart people that have thought about our most critical issues a great deal and add a bit of a twist to get it right. Surely our reps in congress and the senate can discuss, compromise and negotiate these things. Right?
10/12/2022 05:58:21 am
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