Friday, January 16, 2009

Taxes

I am in favor of a simplified tax, a flat tax. Here is my plan.

No one gets taxed on the first $30,000. Regular deductions will be made on that money throughout the year as it is now, but then fully refunded. Everyone will get a tax return. After that, a flat tax on all the money an individual makes will be taxed at a rate of 15%. From $30,001-infinity, 15% across the board. There will be no write-offs, no deductions for children or any other reason, no depreciation, nothing. Simply 15%.

Let me tell you why this is a good idea because I know you are wondering. First, with such a simple tax plan we can eliminate a huge portion of the IRS. This would save millions and millions of dollars in oversight, regulation and wages. Government can make better use of the money they have then on audits and disputations.

It also make the system completely fair. No longer will those with enough money to hire smart accountants be the only ones able to benefit from the thousands of loopholes that exist. No longer will there be an inequality among tax brackets and groups of people. Everyone bears the same burden.

Another advantage to a flat tax is that it allows for better forecasting and budgeting. It is much easier to create a budget off a number like 15%.

As for businesses, the taxes will break down in a similar fashion. No company will be taxed on their first $250,000. After that, all monies will be taxed to infinity at a rate of 15%. The difference allows companies to use their added tax savings to build the company. No credits, incentives, write-offs, or any such thing.

It may not always be used for such reasons but the fact remains; as companies have more money to spend, invest, and divest, it puts them in a position to grow and make more money. As they make more money, they pay more in taxes, but not unfairly or excessively.

This does in some ways benefit small businesses but as they use their untaxed money to grow the company they will hit that level and start paying taxes.

The reason I call for no write offs, incentives, or any other device is because it eliminates private interest. It eliminates lobbyists. It promotes good and better business. For example, if people are drawn to companies and products that promote a "Green" lifestyle then meet the demands of the consumer or suffer.

So there it is. My tax plan, simple, practical, logical, fair...what's not to like other than the fact that you still have to pay them? :)

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