I just had to use that superlative, especially given my recent rant against superlatives.
I have a proposal for the simplest tax system in the world, and was wondering what people think of it. I'll describe it and list my justification for each element:
With this approach, we really could all file our taxes on a postcard. Most of the tax filing could be automated, and the IRS could be stripped to a shadow of itself. If state/local taxes used the same model, all taxation would be simplified.
The single deduction is to allow each person/couple/family to be free of taxation for that part of their salary needed for basic cost of living (food, shelter, health, clothing, etc.). The deduction might need to be regionally adjusted to allow for the variations in cost of living in different parts of the country - or set to a single level that matches to the area with the highest cost of living. I prefer the latter (it will encourage people to relocate to areas with a lower cost of living). The indidividual and couple are simple: they are for a single person or a married couple. The family one is set to allow for a family of four. Two children is basically the replacement rate for population stabilization. Coupled with immigration, it ensures our country's health. If it looks like we need to encourage more births, it could be adjusted to five. If it looks like population growth is too aggressive, it could be adjusted to one. It provides an incentive for population adjustment without a law saying "one child only," etc. Bottom line, if someone wants a bigger family, they are free to, but the rest of us would no longer required to pay their tax bill because of that choice.
As for tarriffs - take a very simple model: our import tarriffs for any given country are set to match their import tarrifs from us. Same with export tarriffs. All countries, no exceptions.
So - comments?
I have a proposal for the simplest tax system in the world, and was wondering what people think of it. I'll describe it and list my justification for each element:
- Eliminate all sales taxes (they won't be necessary).
- Eliminate all business taxes (if the profits of a company are taxed, and then they are taxed again when disbursed as dividends, it is double taxation - we don't need business taxes)
- Tax ALL forms of income equally (there is no rational basis for taxing interest/dividend/investment income differently than other forms of income)
- Eliminate ALL forms of deduction (that includes charities, mortgages, child credits, everything - they promarily serve as tools for people to avoid taxation)
- Establish a single cost-of-living deduction for three types of return: individual, married, family (more on this below)
- Tax the surplus above this deduction at the same rate for all income levels (this rate to be set based on the government budget for the tax year and must be set to avoid a deficit - it is adjusted annually)
With this approach, we really could all file our taxes on a postcard. Most of the tax filing could be automated, and the IRS could be stripped to a shadow of itself. If state/local taxes used the same model, all taxation would be simplified.
The single deduction is to allow each person/couple/family to be free of taxation for that part of their salary needed for basic cost of living (food, shelter, health, clothing, etc.). The deduction might need to be regionally adjusted to allow for the variations in cost of living in different parts of the country - or set to a single level that matches to the area with the highest cost of living. I prefer the latter (it will encourage people to relocate to areas with a lower cost of living). The indidividual and couple are simple: they are for a single person or a married couple. The family one is set to allow for a family of four. Two children is basically the replacement rate for population stabilization. Coupled with immigration, it ensures our country's health. If it looks like we need to encourage more births, it could be adjusted to five. If it looks like population growth is too aggressive, it could be adjusted to one. It provides an incentive for population adjustment without a law saying "one child only," etc. Bottom line, if someone wants a bigger family, they are free to, but the rest of us would no longer required to pay their tax bill because of that choice.
As for tarriffs - take a very simple model: our import tarriffs for any given country are set to match their import tarrifs from us. Same with export tarriffs. All countries, no exceptions.
So - comments?
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