Tax Reform - Rx
Although the Republicans would rather you not think about what they do, and pay attention instead to what they say, what they do with taxes is make it possible for people to avoid contributing to the community from which they derive their wealth.
Herein there be dragons, but I think its worth pursuing. The object is to create a tax code that occupies one page of double spaced text, or less.
1. All tangible and intangible assets received by a person counts as income.
2. Poverty level living expenses are deducted from income. Lets say 12,000 per year, indexed to the cost of living.
3. Savings placed in a federally defined plan is deducted from income. this plan is controlled by the individual and the funds may be invested as they see fit.
4. Money withdrawn from this federally defined plan is income.
5. Money invested in the individual's education or the education of dependents is deducted from income.
6. Taxes are paid on the balance, at a multi-tiered progressive rate, determined by congress.
posted by Dave | 9:21 AM
2 Comments:
We will start with commentary on section 1.
It is argued by some that certain types of income, such as dividends and capital gains should be taxed at a lower rate than wages because this encourages investment and is risky business. This may be true. It may not.
www.rich.frb.org/pubs/economic_review/pdfs/er660602.pdf
Federal Reserve Bank of Richmond
ECONOMIC REVIEW, NOVEMBER/DECEMBER 1980
Taxing Capital Gains, Roy H Web
p. 20
“Changes could be made in the tax laws which would either eliminate or substantially lessen the worst distortions. One possibility is taxing an individual’s entire capital income at the same rate, his labor income tax rate. Compared to the current situation, achieving that goal would improve capital allocation and horizontal equity simply by equalizing tax rates on capital income.
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