Saturday, April 26, 2008

Making America Better with Solutions

There are issues that come up election cycle after election cycle that are never resolved. The Tax issue is one of those issues that is always talked about but never fixed. In the current election cycle the tax issue is only talked about in terms of keeping the tax cuts for the wealthy as passed by the current Administration or letting them expire at a given time. This dialogue does not look to the future benefit of the Nation, but rather only to the wealthy of today.

As the income tax structure now stands in America there is a scale of tax percentages that rise as income rises, on the surface that would seem to be a progressive tax structure. However, if we go back to the foundation of the Country, that it was created on the premise of life, liberty and the pursuit of happiness, it would seem that taxable income should only start after the basic needs of an individual are met. For instance, assuming that the average person in America needs $50,000 a year to meet their basic needs, the standard deduction on income taxes should be $50,000 per person and this would be the only deduction on the tax form. Therefore the tax form would have only a few lines, Gross, Income, Standard Deduction, Net Income subject to taxes, Total Due.

All income should be treated the same, salary, dividends, interest, and investments should all count towards the individuals personal income. All monies earned after $50,000 should be taxed at a reasonable rate such as 15%-19%. Currently, based on 2004 tax data, the Federal Government collected an average of 12.5% across all income levels. Educated economist and Statisticians would be needed to fix the rate at a level that would insure the income needed by the Government is achieved.

On the Corporate level there should be one standard deduction for the cost of doing business. As an example, every corporate tax return would have a standard deduction of $250,000 with no other deductions, all income after the initial $250,000 would be taxed at a set rate of approximately 22%, based on 2004 tax data the Federal Tax collection from all corporations was 8.7%. This simple tax solution should produce more than enough revenue for the Governments needs. Of course the Citizens would have to watch the spending and insure that the Government is acting prudently.

A simple Individual Tax System would enable families to live at a higher standard and enable savings and investments. The Corporation would no longer spend money for lobbyists to lobby for tax benefits, there would be none available. The Politicians would not be beholden to lobbyist.

To insure that Social Security remains a viable program, all earned income should be taxed at a set rate, without a cap. This would enable the rate to be lowered for all while still keeping the Social Security System Solvent.

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