How to redesign tax code?

[Jiggers]

Short of a national sales tax, how would you redesign the tax code to either make it fair and/or simplified? And, keep our jobs!

Not that our elected officials would listen to us, but surely we can come up with some good suggestions.

[Bees Knees]

You can’t, and here is the reason why.

Simple is no problem. Just say everyone pays a flat 20% of income with no deductions or credits. Easy to calculate, but is it fair?

Well, to someone who is currently paying out 25% of his income in taxes, he might say it is fair because he doesn’t like having to pay a higher percentage of tax than the next guy who is only paying 15% of his income in taxes. But then someone in the 15% tax bracket says it is not fair because he now all of a sudden has to pay out a higher percentage of his income in taxes.

The only way it could be fair for everyone is if everyone in society were to make exactly the same level of income and have the same exact tax situation. Then any change in tax would be identical and fair for everyone. But since that is not the case, no matter how you change the tax laws, someone will always have their taxes raised while another person has their taxes lowered. It is impossible to change the rules where everyone has the same proportionate change in tax, without first having everyone have the same relative tax situation.

Further proof can be found on the back cover of TTB, which lists the 2003 federal individual income tax statistics. The top 5% of earners (people who made over $130,080) paid 54.36% of the total tax burden for all taxpayers, even though they as a group only earned 31.18% of total income, while the bottom 50% of earners (people who made less than $29,019) only paid 3.46% of the total tax burden, while earning 13.99% of total income.

It would be impossible for these two groups to ever come to an agreement on a “fair” change in tax law.

[jainen]

desires and guilts

Another reason is that taxes can never be only about raising revenue. We use the tax system extensively for social and political goals. For example, capital gains enjoy a favored rate to encourage investment in the capital markets, which otherwise might be perceived as too risky. We offer deductions for charitable giving, an important part of our economy. Many other tax code provisions relate to our public desires and guilts.

[OldJack]

I would repeal all personal federal and state income tax codes. Replace with a product value-added on cost basis tax and tariffs on comparative import products. Let the d-a-r-n arab countries pay thru the nose for our food and manufactured products.

[Don B]

Another reason is that taxes can never be only about raising revenue. We use the tax system extensively for social and political goals. For example, capital gains enjoy a favored rate to encourage investment in the capital markets, which otherwise might be perceived as too risky. We offer deductions for charitable giving, an important part of our economy. Many other tax code provisions relate to our public desires and guilts.

If not for this little ditty.... The Fair Tax would be a great answer.

[veritas]

If I was King

I would eleiminate the education department in the federal government. I would eliminate all road taxes and use taxes and get the federal goverment out of the road building business. I would sell Amtrak. I would bid out the US Postal service. I would eliminate half of the staff that supports the executive and legislative branches. I would eliminate the census bureau othe than counting people every 10 years. I would eliminate the federal labor department.

I think once I got done eliminating all the wasteful useless agencies and programs we wouldn't have to worry about how to change the tax code other than how to eliminate it.

[sea-tax]

I love the current system sure it can be a little cumbersome , In a perfect world I would like to see less possible depreciation and maybe no amt. However just like our political system. Yeah it has problems but compared to the rest of the world I will take it.

I personally would prefer more changes to the payroll tax arena than any other. As someone who is 25 years from retirement, I would love to see a repeal of social security.
Or at least make it an optional choice. I really have a problem giving into a system which I may never get anything out of.

[jainen]

higher taxable earnings.

You think roads and education are not general public matters? Should be everyone for himself?

You wouldn't eliminate defense, I notice. As a matter of fact, our interstate highway system was originally set up and maintained out of the defense budget. And our modern system of higher education was primarily funded by the G.I. bill in the forties and fifties. Both have repaid the investment a million times over through improved commerce and higher taxable earnings.

[Don B]

I would eleiminate the education department in the federal government. I would eliminate all road taxes and use taxes and get the federal goverment out of the road building business. I would sell Amtrak. I would bid out the US Postal service. I would eliminate half of the staff that supports the executive and legislative branches. I would eliminate the census bureau othe than counting people every 10 years. I would eliminate the federal labor department.

I think once I got done eliminating all the wasteful useless agencies and programs we wouldn't have to worry about how to change the tax code other than how to eliminate it.

WHO IS JOHN GAULT?

[JON]

Schools

are important!! They will be as good as the parents want them. 1960s was the highest scoring SAT scores, although in the 80s the education easied the grading to make them look better. Someone please tell me what the eduction department does in DC???, that benefits a classroom. There will always have to be a redistribion of revenue to help certain areas, but a couple of cheap accountants could do that. In 1990 I read some information about how much the price of education had gone up. The main reason for the 20 year climb (1970-1990) was administrative and teachers had done just a little better than inflation. No matter how much you spend the schools will be as good as the parents want them. They get the kids ready and they know what they expect.

Washington DC is broken and can not be fixed. You have politicians and a couple of million people being paid to influence their vote. What could that ever produce????

Whoever gets elected to go to DC just make sure they have never been there.....

[OldJack]

Who are you calling "cheap"?

There will always have to be a redistribution of revenue to help certain areas, but a couple of cheap accountants could do that.

Wait a minute JON!!! Why are you calling us accountants "cheap"? That is worse than my comment about hiring dumb blonds.

[JON]

$12 billion

to the Department of education- anything would look cheap next to that... A lot of cheap accounts instead of that.

[jainen]

is that all?

$12 billion, is that all? So our war based on lies would have completely funded that department for the next two generations?

[veritas]

You think roads and education are not general public matters? Should be everyone for himself?

You wouldn't eliminate defense, I notice. As a matter of fact, our interstate highway system was originally set up and maintained out of the defense budget. And our modern system of higher education was primarily funded by the G.I. bill in the forties and fifties. Both have repaid the investment a million times over through improved commerce and higher taxable earnings.

Defense is the only legitimate thing the federal governmnet does. If the department of defense wants to provide doctorate degrees for all those who serve in our armed services I don't think it is enough, just don't tell me the federal government can tell my local school district how to do things.

[jainen]

We sure don't need the government

We sure don't need the government to print the money. In the good old days, every bank printed up their own, and if you couldn't tell the good from the bad that was your own tough luck. So let's dump the federal reserve system. Oh, I forgot. The Federal Reserve IS a private corporation, and not even an American one!