Fair Taxation

By Kempion

What is a taxpayer?

Seriously.

When it comes to Federal income taxes, a taxpayer may not be so simple to define. Is a taxpayer any person that pays income tax? Well, the short answer is no. The fact is, taxpayers are those people that pay taxes and don't get them back. If you pay in and get all of your taxes back, then you ARE NOT A TAXPAYER! If you get back MORE than you paid in, then you are not a taxpayer, you are a tax liability to all of the real taxpayers. By the grace of the real taxpayers, you are getting a hand-out that is supposed to help you get on your feet so that YOU can contribute to the system.

The jury is still out on whether the EIC program is truly helping anyone or not. I tend to view it as a waste of funds and just another spending tactic of the socialists to win favor with voters in poor areas. If I had my way the earned income credit would be repealed. This is another example of socialism gone awry.

So, what would be a fair taxation system? Well, first of all, the class warfare garbage has to stop. Hating people because they have more, earn more and aspire higher than oneself is simple folly. If that obstacle can be overcome, there is hope for a fair taxation system.

What we need to do is to determine, without economic bias, what we are attempting to tax. Currently we only tax successful wage earners. Everyone else gets a free ride. That is not a fair system. This is nothing more than taxing lifestyles rather than taxing income. Is my left hand worth more or less than anyone else's? Of course not. I don't care how you use your hands either. A hand is a hand. So, why are some people forced t_ pay an arm and a leg in taxes when others only pay an arm or nothing at all? Class warfare. Again, this mindset of taxating people because they are more successful is folly. A bracketted tax system is, therefore, absurd and unconstitutional. You can't selectively treat some people worse than others.

What we SHOULD be taxing is income and only income regardless of who makes what. Its not about the dollars you are taxed, it's about the equality of taxing according to each individual's income and how thy pursue it. Maybe an interantion corporate executive NEEDS a private jet to make his rounds. What business is that of your's? You need transportation too, right? Just because he travels greater distances, he should be penalized for it? Ridiculous. He has his lifestyle and you have your's. Therefore, the only way to fairly tax everyone equally is to adopt a flat tax.

Now, some people will argue that a flat tax favors the rich because it would reduce the tax liability that they have. This assertion of benefit is purely a class war issue and I won't address that further. (Reread the last paragraph if you don't understrand.) Will a flat tax reduce the tax burden that the wealthy have? No. This is why: With tax-defermenrt, tax shelters and non-taxable intersts the wealthiest taxpayers can avoid a lot the taxes that they would normally be paying. This isn't tax evasion, its an advantage of wealth that they can afford to make these high end investments. And, I don't blame them one bit for doing it. I wouldn't pay 70% income tax if the IRS held a gun to my head. Like anyone, they take action to protect themselves, their families and their way of life. The way to make a fair tax system would then also have to eliminate all of the 'advantages' that the wealthy use to preserve their lifestyles while at the same time not unfairly over-taxing them.

A flat tax, that is applied to all income, regardless of amount, is the only way to tax fairly. This tax cannot allow for deductions of any kind. Not for student loans, business expenses or dependents. It's not like this tax is going to be so high that there will ever be a need for deductions anyway. Think of it this way: your student loan gave you your edcuation which allows you to be employed at a higher salary so you can afford to pay it back and pay your taxes on top of that. A business has a 'cost of doing business', if that business isn't willing to buy inventory or whatnot, then it has no business being in business. If you can't afford to raise your children, the you shouldn't be having children. Besides, that borders on abuse, which is another topic altogether. I've made my point about deductions, if you need more proof then you can email me and I will answer your specific questions.

So, we come to the point where we have to decide what is a fair flat income tax percentage. Before I get to that, let me insert here that the percentage of the income tax should be inversely but directly related to the previous year's percentage of growth/loss in gross domestic product. For example, if the GDP gains 3% then the tax percentage should be reduced by 3% of the standard rate. So, let's say the standard income tax rate is 15%, then the following years income tax would be reduced by 3% of the 15% (.45%) to 14.55%. Now, some of you are thinking it should be reduced to 12% overall. That's not a valid thought process and here's why. What happens to the tax rate if the economy doubles, a 100% increase? Under my system, the tax rate becomes 0%. That's fine if our economy could ever double in a single year and it may very well again in the future. We don't know what advances will come along and what inpact they will have on our economy. However, if the economy doubles and we reduced the tax rate by 100, the we are going to be askng the IRS to issue checks for 85% of our income and send them to us stat! Ridiculous!

Taxpayers under my sytem would directly control their own tax rate. Do you want to lower your taxes? Earn more then... what a concept!

One more point about this flat tax that I have to address before moving on to breaking down the tax itself and that is refunds. There aren't any. We are all paying in and, therefore, are real taxpayers. This also eliminates the need for the IRS or at least greatly reduces its significance. The second reason is this will motivate everyone to produce more. The more you make, the more you keep. Unlike the socialist left, I believe in the allowing people to be people and allowing them to pursue their dreams without trying to coddle them with social engineering experimentation.

What should the standard tax rate be then? I believe that if all the components are in place as I have outlined then the tax should be a little higher than 15%. For one very good reason and I already mentioned it: Do you want to lower your taxes? Earn more money then... what a concept! Motivating people to control their own financial destinies is not only productive to everyone that wants to get ahead and has been overburdened by taxation but its also is a great way to combat complacency. Complacency breeds apathy and apathy breeds reduce self-worth. Inspiring everyone to earn more and showing them that they can become more than they today in only one year's time is a powerful tool.

And now ladies and gentlemen, my proposal for a standard flat income tax rate is.... (insert drum roll)

20%!

Yes, under the conditions I have laid out, this tax rate may seem high but remeber, we can control it by being more productive.

Now, my calculations and I'm not a CPA, lead me to believe that revenues will triple in the first year of this tax system. Think about all the income that is currently untaxable and hidden away in shelters and how much deductions reduce current tax revenues. Its staggering. So, what do we do with this massive influx of revenue? There's really only one thing that can be done with it, invest it. Think ahead for a moment. If Americans show themselves to be the industrious people that I know we are, then it won't be long before there is no federal income tax at all. That's right. It may take thirty years of consecutive growth to reduce the tax to 0% but it will happen. Americans are just that way. Set a goal and go after it. So, the federal government had better plan ahead. Balance the budget, cut ridiculous spending and find ways to invest in our future that will actually pay financial dividends.

My tax plan is fairly simple. A flat tax that is non-refundable and applies to all income without exception. Give the taxpayers a chance to control it directly by their daily efforts and they will eliminate it altogether.

What say you?

kempion@everydaypeopleradio.com

http://www.everydaypeopleradio.com/