Posted on Apr 1, 2015
What can be done to simplify the existing tax structure in the U.S.? What should be done?
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I saw something interesting on one of the ongoing political threads. Someone made the statement that the rich should be taxed more, because they pay a smaller percentage of their income as taxes than do the less fortunate.
On the face of it, the statement is bunk. Tax brackets escalate -- you make more, you pay more.
However, through the magic of deductions, probably most people don't actually pay what the tax bracket indicates -- and that goes for middle class folks as well as rich folks. So it is conceivable that at least some rich people pay a smaller percentage in taxes than poorer people. The problem with making that claim, though, is there is no way to quantify it.
So... What to do about it? What can be done? What should be done?
On the face of it, the statement is bunk. Tax brackets escalate -- you make more, you pay more.
However, through the magic of deductions, probably most people don't actually pay what the tax bracket indicates -- and that goes for middle class folks as well as rich folks. So it is conceivable that at least some rich people pay a smaller percentage in taxes than poorer people. The problem with making that claim, though, is there is no way to quantify it.
So... What to do about it? What can be done? What should be done?
IRS
Taxes
Politics
Edited >1 y ago
Posted >1 y ago
Responses: 5
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There are many options for taxing Americans to pay for the services Government provides. I was a fan of the "9/9/9" plan. I'm also in favor of a "flat tax," that is a single tax rate for all Americans. The flat tax would greatly simplify the tax collection system. No deductions or exemptions, just write down your total income, multiply by a percentage, send in the money. In this way, everybody has some money (skin) in the game. The flat tax would hit all tax payers with equal force proportionate to their income. The "rich" pay more dollars than the "poor". Some will protest that this unfairly taxes those who paid no tax under previous tax plans. Yes. That's true. But, all Americans would be paying some part of their income to support the services the Federal Government provides. A flat tax should allow reduction in the number of IRS personnel necessary to enforce the tax law. Also, a lot of tax lawyers and accountants will be out of business. The whole taxing process could be accomplished on-line or on a postcard. Also, change tax day and election day so that election day comes 1 day after tax day. It will put a whole new perspective on fiscal accountability for elected officials.
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A flat 10% tax on everyone. No deductions, no exemptions, no exceptions on anything earned over $12,000. Additionally, if you are a retiree, Social Security Payments should NOT be taxed. It has already been taxed as part of our gross income when we were working.
I'm a retiree. With my SSA check and a modest pension I would fall into the 12% tax bracket until I added my withdrawals from my 401K at a minimum rate of 2.5% annually, which you are required to do at age 72. Well, that bumped me from the 12% bracket to the 25% bracket. After reviewing the proposed House of Representatives tax bill I found myself still in the 25% bracket because now I can't deduct my state taxes, and will likely pay more taxes then before.
I believe most of us were expecting a tax overhaul that would simplify and reduce what we pay in taxes that would be more equatable, especially for the middle income earners; which is yet undefined. Instead what we got was an adjustment in the tax brackets that only benefits the lower income bracket up to $24,000. We need to let both the House of Representative and our Senators know that this is not what we were expecting and is not a tax break for middle Americans. It's yet another scheme that may sound good to some, but maintains the status quo. I want to see a huge reduction in the bureaucracy.
I'm a retiree. With my SSA check and a modest pension I would fall into the 12% tax bracket until I added my withdrawals from my 401K at a minimum rate of 2.5% annually, which you are required to do at age 72. Well, that bumped me from the 12% bracket to the 25% bracket. After reviewing the proposed House of Representatives tax bill I found myself still in the 25% bracket because now I can't deduct my state taxes, and will likely pay more taxes then before.
I believe most of us were expecting a tax overhaul that would simplify and reduce what we pay in taxes that would be more equatable, especially for the middle income earners; which is yet undefined. Instead what we got was an adjustment in the tax brackets that only benefits the lower income bracket up to $24,000. We need to let both the House of Representative and our Senators know that this is not what we were expecting and is not a tax break for middle Americans. It's yet another scheme that may sound good to some, but maintains the status quo. I want to see a huge reduction in the bureaucracy.
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Shut down IRS for good and only tax private corporations and sales transactions?
Riiiight, but that would make too much sense and less government misappropriation. Am I wrong? Talk to me!
Riiiight, but that would make too much sense and less government misappropriation. Am I wrong? Talk to me!
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CDR Brian Gauck
The flat tax makes sense. The latest proposal I read about would tax at 17% incomes over $52,000 annually. I've seen my "tax deductions" eroded over the years by the IRS. For example, Reserve members used to get to deduct all costs associated with Reserve travel, uniforms, etc. But that was changed by the IRS cronies to have to meet the 2% threshold (similar to medical expenses). Since travel to Reserve Center was not reimbursed or paid by the Unit/DoD, that added more burden to the individual, especially as the number of paying billets decreased.
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