Thursday, June 23, 2016

Eliminating the Payroll tax!

The payroll tax is a tax all Americans in the U.S. pay.  This particular tax is a name for the two taxes that are used to pay for Social Security and Medicare part A.  So how could they get rid of this tax like so many Presidential Candidates in the current 2016 election have promised?  

Basically, candidates like Ted Cruz, Trump and former candidate Rubio would integrate it into the regular tax scheme.  Basically, you would be taxed at the current tax rate with no payroll tax being taken out.  This allows you to keep more money in your paycheck and apparently could mean the elimination of tax returns as the payroll tax is taken out first and causes issues math wise with the IRS.  But what about actually contributing to Social Security and Medicare part A?  Well, the IRS would take a percentage of what you pay to the government in taxes and pass it on to Social Security and Medicare part A.   This is much easier to do as you are still contributing by you paying taxes with just the exception that the IRS takes the money out of the total amount you pay in taxes rather it being two separate (three technically) taxes.

However, if the Candidates really wanted to do the right thing, they would eliminate the income tax with the payroll tax and switch to a national sales tax.  We would get to keep all our money, but we get taxed when we buy stuff.  The more you pay for something the higher amount of taxes you pay per year.  Under this system, just like the income tax system, a portion of what you pay in taxes will go toward Social Security and Medicare part A.  The only difference is that you don't have to file for income taxes any more, and illegals, criminals, foreign visitors and others all contribute to Social Security and Medicare thus adding more money to the system.  

Conclusion:  Obviously I want the income tax gone, but I'll settle for just the payroll tax going away for now.  Reason being is that Social Security and Medicare will still get funded, and it saves time and effort with respect to filing taxes.  Eliminating taxes is a good thing as it frees people up monetarily so they can buy the things they need (or want).  Still, I think a sales tax makes more sense, but this is just my take on the issue and why I'll be voting Republican in the United States 2016 Presidential election. 


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