Thursday, April 3, 2008

The Tax Code

As the U.S. Tax Deadline looms it would be nice if the Presidential Candidates talk about the changes that they would like to see in the Income Tax Code. The "Conservatives" are always talking about how they want "smaller" Government and less taxes, but they never present a viable plan. The Plan that is usually presented involves lower the tax on the wealthy, this hardly qualifies as making the tax code equitable.

An income tax that is equitable to all would be a set percentage to all with the same deduction for all Individuals and Corporations. The income that an individual needs to survive should not be taxed at all. The standard deduction for all individuals should take into account the income that is necessary to live, thus the money paid for, food, clothing, shelter, health care and transportation should be the basis for the base deduction. As an example, let's say that number at 2008 dollars in $55,000 per person. Therefore, any income below $55,000 per person should be exempt from income tax. Then there should be a set rate for all Individuals income after this base deduction of somewhere between 10-15%. Income would include all active and passive income, including Capital Gains and Inheritances, which should be included as income in the year that these gains occur.

For Corporations the same principals should apply. All Corporations should have a base deduction, that would offset the some of the overhead of doing business. Let's say the fair number is 1.5 million dollars in 2008 dollars. After the base deductions all Corporate net profits should be taxed at a set rate 5 % above whatever the individual tax rate is set at.

The US Government would save money on the printing of forms, direction booklets, postage, processing, and enforcement of the now complex Tax Code. A Tax Code as simple as the one suggested would eliminate layers of wasted manpower at the IRS, and produce a more stable Treasury, and most of all would be fair and equitable to all.

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