Friday, August 12, 2011

The Truth is so Hard for Politicians (Tax Reform)

Okay we have this silly partisan battle going on in Congress now that does nothing to help the American people It is over "how big government is." I do not understand how pepole who hate government so much can be part of it. If you ask a tea party person what governemyt should cut they say waste and leave government out of my Social Security benfits. Of course it is those fat cat government workers adn teachers who are putting a drain on our society. As a teacher I can not help but wonder why teachers are considered overpaid while they fight tooth and nail to protect the income of corporate executives, hedge fund managers and doctors. I feel so much better knowing a corporate buraeucrat at the insurance company is the person making decisions about my health care rather than one in the governmeny because we all know his company only has my interst in mind.

Of course if we eliminate all the teachers and any other government worker who might actually have a union to help protect them we would only put a dent in the debt. I mean we fought two wars on our credit card for like 7 years and tried to dismantle as much of the corporate governance as the Bushies caould accomplish. Then we had to bail out all those companies that had careless and immoral busiess practices nearly destroy our entire economy. So the public debt is real and can not be eliminated by "tightening our belts." The United States government is not a business. It can not be run like a business because it is meant to creatye a profit. It is meant to produce needed public goods and services that the pivate sector can not or will not produce because they can not do so economically. (8th grade civics)

And how does governemt pay for this stuff? Exactly two ways: taxes and by borrowing. Of course the borrowing will still need to be paid back with taxes. We borrow because the reliablity of taxes fluctuates with the economy and things come up, wars, disasters, bad choices, etc. The real questions here should:

1 Why should i need a complex tax program and a lot of time and patiance to file my taxes each year. I mean even the simple forms are really complicated now
2. Why does a hedge fund manager pay a lower tax rate than his secretary?
3. Why do we have corporate income taxes if the largest corporations dont pay any? Doesn't that mean we are really only taxxing small businesses who are suppose to be the job creators.

The basic problem is we have used our tax codes to try and encourage particular behaviors or to reward large campaign contributors or to hide government expenses. It is time for it to stop. I dont want to pay more taxes, no one wants to. The reality is some one has to begin doing so. Over Americans are paying less then they have since like WW2. George Bush became the first leader in history to go to war and do a tax cut. This is insanity. This is the reason we are in decline because we have to pay for what we do. While there are certainly ways to spend less everyone of them involves putting people out of work.

Here is what i propose, no deductions, none, nada. What you earn is what you pay tazes on period. I dont have good enough informatio to provide exact numbers but it could work something like this:

The first 20,000 is tax free for everyone
from 20,000 to 60,000 You pay like 5% somewhere in here you use all of it to pay for entitlements
from 60.000 to 100,00 you pay 10%
from 100,000 to 200,000 pay 15%
from 200,000 to 300,00 pay 20%
from 300,00 up pay 25%

The source of the income does not matter. wages, investments, the lottery what ever. Of course these numbers could be tweaked to make sure revenue was adequate and an increase of say 1/2 or 1% during a crisis would be failry distributed and not be all that painful.

I would have no problem with eliminating corportate income taxes all togetheras well with the exception of an excess profit levy to help keep corporations honest. Oh and stock options, vacations etc for executives are income. No hiding it

It is just a framework but clearly it is time to clear one form of governemyt grid lock that will benefit 95-98% of Americans. If the federal governemnt adopts this it may be possible to se chance at the state levels as well. Tell your legislator you want simple fair taxes on every American. It is our duty and it is part of what makes America great.