Skip to content

Taxation

2012-01-05

Taxation
We need to change our taxation system so that it is fair, by which I mean progressive. A flat tax is much easier for a millionare to pay than for someone who isn’t making enough money to live on as it is. Flat tax is only fair in the imagination of those who have plenty of money.
To start, we will say that all income should be treated equally for taxation purposes, that is capital gains will be taxed the same as ordinary wages or salary. Instead of a flat 15%, capital gains will be taxed progressively from zero to 15 to 25 to 35%, or whatever total revenue requires.
At the same time, Social Security and Medicare taxes will no longer be flat with a cap: they will also be progressive with no ceiling. Rates will be adjusted to ensure that revenue matches expenses.
Corporate taxes will be treated in the same way: as ordinary income. All the profits of a corporation will be taxed in a progressive fashion, as if the corporation was a person.
Total tax rates will be based on the amount of revenue needed, and progression of rates will depend on the same formula: three or four steps, from 0 to 10 to 15 to 25 to 33 percent, for example.
With a larger tax base, it will be possible to reduce taxes for the poorest people. For example, someone making minimum wage might be exempted from any taxes. All his or her income could then go to living expenses; at minimum wage, it is impossible to save anything. Eliminating taxes on these people would encourage them and stimulate the economy by increasing spending on the cheapest commodities.

Why have a deficit at all? Just set the tax rates for next year based on the expenses of last year. That way, you will have a pay as you go government.
With all the rates set in a progressive fashion and all income treated equally, it will be completely clear that the cost of government is paid by those with the ability to pay: those who have more income.

All changes in the taxes must be made gradually, in yearly steps for three to five years.  This will reduce the shock of the changes.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: