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Solving the complexity of the IRS Tax Code, for more than 60 years, has been nothing more than an excercise involving a pack of Brush Beaters in India chasing after the Eye of the Tiger! Which Tax Deductions would your family like to give up? Your Home Mortgage on your Primary Residence Deduction? Sending your kids to College Deduction? Your Health Care Expenses Exceeding your Annual Income? What about the Taxes you pay to the State? Should they be a Deduction? How about keeping your Property and Business Investment Deductions?
Every time politicians get the chance during a National Election year….they go after what is lovingly known as the Flat Tax. Doesn’t it make all logical sense that everyone should pay the same percentage of their income – as a tax? Well, it does if you make enough money – that 9% or 28% isn’t going to take food or gas money out of the family budget. The problem is our Social Contract as a country and a society. They call it a “Progressive Tax System” that we presently enjoy in the United States. In a Progressive Tax System: The more you make the higher percentage tax you pay. Or at least, are supposed to pay. What this means is that people like Bernie Madoff were supposed to pay more in taxes than some homeless person in Chicago. When that does not happen, you have a Tax inequity problem and the concept of fairless flies out the window.
When American Companies take all their physical presence out of the United States, make millions of new jobs for foreign countries, take ridiculous and greed borne bonuses over several years and then finally set up a paper office in a an American City just to take the tax write-offs….yes, there is a strong feeling that our Tax Code is not working its best or with a sense of fairness to “Joe Six-Pack”. The worst part of course is that these same companies can afford an army of lobbyists to make sure that current members of Congress have their skids greased plenty either for coming re-election campaigns or for family and friends junkets.
Thinking that a so called Flat Tax will solve any of this is naive if nothing worse. No VAT either. Countries with the VAT are ripping off everyone including their own tax payers. Everyone pays the VAT, but only foreign tourists can get anything back. All of these so called quick solutions to the IRS code have creeping increases included. What starts out at 9%, may well soon be %15 percent in three years – and that might be optomistic. The truth of matter is that indeed the current IRS Tax Code needs to address egregious actions of International Companies abusing our system. The IRS Tax Code needs yearly revisions which attempt to protect the dwindling middle class ($35K to $100K). Additionally, the IRS Tax Code for big companies needs to be revised every five years no matter what. Sending operations out of America should have some ramifications. Merging or Acquiring Global Companies and then having them utilize the US Tax Code as a haven for the those operations needs to stop.
Does the United States need to return to Tariffs? Charging foreign companies for bringing their goods into the United States? The concept is that Tariffs go against Free Trade and inhibit the export of US goods! The truth is there are many good Tariffs….like those for Steel and Coal…which were designed to prevent what they call “Dumping”. An example is: If steel is selling for a specific moderate price which folks can afford and the create other goods affordably and China decides to dump a whole bunch of steel on the American Market, there will be a sudden drop in price which winds up putting US producers of these goods out of work or closed. Once closed, the China producers double the cost of steel and takeover an uncompetitive market, until someone else can dump steel again and try to put them out of business. The main point is: American jobs are lost forever! Just look at Pittsburgh and the demise of those steel jobs!
NO Fat Tax; Herme and Ricky! If you are going to come up with solutions for the American Taxpayer…where are your Army of Lobbyists waiting in the wings to protect our current IRS Tax System which attempts to keep it a Progressive Tax System! The rich need to pay more. The rich are entitled to their fair share of profits. The rich are entitled to set the the standard for good conduct and responsible citizenry. Great Rewards require Great Responsibility! Should those suggesting a Flat Tax be successful, they soon will discover that the Flat Tax was never designed to remain Flat…but designed to get Fatter as the years go by!