Now that you have dealt with me and my two weeks worth of saying not to tax
all these different people, your wondering who is left to tax? Who is going to
pay the federal governments (and the State and local governments’ bills)? Well
these exceptions leave only two groups left.
The progressive income tax: If you remember from Issue 267
Don't tax the poor, people making under $30,000 will not be taxed. Those making
between $30,000 to $40,000 will be taxed a flat rate of $2,000 and those who
make $40,000 to $50,000 will pay a flat tax of $4,000. Everyone else will abide
by a traditional progressive income tax after that. In this case $50,000 to
$100,000 will be taxed at ten percent rate. At $100,000 to $200,000 they will
be taxed at 15% and anyone beyond $200,000 will be taxed at 20%. This is what
it would look like at least at the federal level of taxation. Since the
majority of the income tax is paid to the federal government by the top ten
percent of income earners (80% of the money taken in from the income tax is
from them) we should be well off there. Especially as cost cutting measures
will still need to take place regardless at the federal level. State level
wise, the States should abolish their income taxes all together. One of the
most punitive forms of taxation is the income tax (no matter its form) and thus
is the biggest inhibitor of business. There is a reason why the States like
Texas and
Florida
recovered first after the great recession, it was because they had no State
income tax. To make this work, there will be no deductions for things like
charity or anything save loans that must be paid off. The poor will no longer
need such things under this system as many people will no longer need such
exceptions. This also insures that all the subsidies and exceptions that
usually benefit the rich (70% of deductions usually help the rich rather than
their intended target, the poor). Let us also not forget that paying the taxes
(hiring an accountant) is costly with American citizens paying millions of
dollars a year just to get their money in order. So there is plenty of
additional savings to be had by simply not taxing these people and simplifying
the tax in the first place.
Retail: With all those producers and individuals no longer
being taxed, both the Federal government and the States must find an
alternative. In this case it is a sales tax exclusively at the retail level.
Yes, you are probably screaming at me saying, wtf to higher costs of groceries
and other items you buy at retail stores, but here is what you are forgetting.
You are forgetting that you will be keeping much more of your money as you are
probably in one of those individuals that cannot be taxed. In addition, prices
will already be lowered based upon how much cheaper goods become when the
producers of those goods no longer have to deal with the taxes they used to
pay. So overall, the prices "should" balance out with certain exceptions
(those that do not follow supply and demand and those goods and services that
are affected by other government regulations/bad businesses). In this case, the
sales tax will be small in the realm of five to ten percent as the income tax
will still exist. At the State and local level, the tax will probably increase
as certain properties like those of seniors and of various institutions become
nontaxable. But the benefit is that sales taxes on goods and services are not
as troublesome to deal with. You can still use coupons to cut costs, and sales
of the week will still happen. Also, there are more goods and services being
bought and sold in the
United
States than we have as a population. As
such, with the combination of this altered progressive income tax and this
retail tax (all other business taxes should disappear) will more than make up
for the lost revenue.
Imports and exports: Since the country began, imports and
exports along with fees on the sales of foreign goods have been subject to
taxation. We should continue this only on imports. If we want more money for
businesses to expand, create jobs and thus by default generate more tax
revenue, we need them to be able to sell any and all goods and services that
they see fit. So we do not tax goods and services leaving the
United States.
All other countries do not tax exports as they know it will hurt businesses and
thus they do not. This is one of the few times I say we should copy other
countries. Imports and additional sales taxes on imported goods will make a lot
of revenue (especially on cheap knock off products from other countries) and
thus make up for any trade imbalances.
Land Sales: The final form of taxation that is left is land
sales. Just as you are thinking it is a sales tax on someone buying a home.
When the
United States
was first founded the federal government made a lot of money this way and only
really fell short during the civil war. So taxing land sales in the same way
you would at retail would be most beneficial.
Conclusion: As you know, I am a libertarian. You also know
that I hate the income tax as a whole. However, I try to be a realist when I
can. We cannot get rid of one form of taxation without replacing it with
another. Also, we can all agree that the federal government (States and local
too) need to trim themselves down. As such, I put forth the aforementioned in
combination with my tax exceptions from Issues 263 to 271. My goal is to make
it so that at some point we can eventually be rid of the income tax completely
at the business level (which this idea almost accomplishes) and we cut down on
the income tax as well by making it more regressive for the people on the lower
end of the economic ladder and somewhat more manageable for those at the higher
levels. Of course this will only work with a lot of budget cuts and reforms at
all levels of government (most of governments functions can already be done by
the private sector). Yes, we can make reforms and we can succeed in making a
better more manageable tax code. By doing all this we can get the government
monkey off our backs.