Issue 42 My ideal Income tax March 27,2013

Well, my true ideal income tax would be its utter elimination along with the 16th amendment, but alas, that is only a dream at the moment. So here is my ideal income tax that deals with reality.

A true Progressive tax: It is a flat tax. Everyone is taxed at the same rate without exception. You are probably wondering why that is a progressive tax, if everyone is charged the same rate. Well while our current system does tax the so called rich more, it is at a different rate than the rest of the people in different tax brackets. We currently have six different tax rates. The rich under a flat tax would still pay more no matter what.

By switching to a flat tax we gain a significant advantage in reducing the amount of poor people in this country. The current tax code actually helps to keep the people poor as if they go to a higher tax rate, they will actually have less money. An example, say you make $10,000 a year and are taxed at a 10% rate. So you pay $1,000 in taxes. But, if you make $10,001 your tax rate can jump to 16%. So you are now getting a clearer picture as to why the current rate helps to keep the poor.

Basically I want social mobility in the tax code, and a flat tax helps to solve that problem.

No deductions: There can be absolutely no exceptions to the tax. Every single person must have some skin in the game. So, yes, I would tax the poor, but for a good reason. For one, without deductions, or any other loop holes, tax rates will drop dramatically. This also makes it much easier to pay taxes and thus saves the average citizen important personal time raising their kids and taking care of life's problems. As to why the poor should pay. Yes there will be lower rates and thus if they pay taxes it will be easy, but that is not the only reason. If an impoverished person and on welfare, you have no incentive to keep taxes low as you get all the money you may pay in taxes back. As a result, a poor voter can vote for a candidate that will give them all the benefits they want at the cost of everyone else. It becomes a cycle where the country delves into a fiscal mess. Plus welfare will still be there, but it will have to be reformed to ensure that people receiving it have an incentive to get off it. This is the only way the system will work if we keep the welfare apparatus that is in place. Though it is interesting to note Mexico has no welfare system, but not a single person has died as far as I know due to starvation.

Do not tax investments: Investments are not income, they are money (that in bare bones terms) that you lend to a business or group of businesses on the stock market, from which you are rewarded with interest if that business succeeds. More investments equals a better economy is a basic and time held rule governing the economy since the idea of investing was invented. This money put in is already taxed and thus a form of double taxation. We should not have any form of double taxation, not to mention, these investments may be peoples retirement income. I for one do not want the government robbing anyone of their retirement no matter who they are.

Conclusion: Real simple right. One low flat rate that allows everyone to continue getting rich, no matter who they are without penalty, is that not a dream come true. I would make it so that any changes to raise taxes or amend the law will require a super majority vote of about 4/5ths of both houses of Congress (if this idea is done in the U.S.) to insure politics does not ruin the system and harm our nation by giving people a free ride. Though, if I had to choose between my business tax and this one, I would choose the business tax as taxing individuals makes criminals out of people who fail to pay or forget small pieces of documentation. Businesses on the other hand, under my system would find it easier to pay taxes and they pass those costs onto the consumer anyway. If we just had a business tax, then we would not need the IRS to harm our citizens and possibly be used as a weapon by politicians. Not to mention the unreasonable requirement of keeping tax records for 10 years at a time. To me, the logic is simple, get rid of the current tax code, make it simple and fix welfare, then we may not even have to borrow all that money to support our government and its silly spending on shrimp on a treadmill or poetry reading cowboys.