Mothers' Day seems a little empty nowadays with the Author's absence of a Mother, and so he is contemplating odd Thoughts today, especially after reading a current Posting by Mark Thoma about the actual progressiveness of the Federal Tax system. We have a mess with the Tax Code now, never more so because of the Bush Tax Cuts and their sliding Expiration dates. The system is simply crumbling under it's own confusion.
This Author began to consider a Series Index, where Lifetime earnings would be estimated, instead of current Year recorded. The length of Time considered should naturally be 45 Years in duration, but with allowable extension before and after, with Highs and Lows knocked off with expansion. The normal estimates of Income growth would be included, altered to account for the Inflation rate. Each Year of Recorded Income would affect the overall Average and Estimates of Income, and the Rate of Taxation would shift appropriately. There could even be a program of Tax rebates in evaluation of the overall data (the Individual not expected to earn the average growth normally assumed).
What is the purpose here?
Several ideas can be presented. The First and Best would be the Means to eliminate all forms of Tax deductions, exemptions, or credits. The second Thought would be that younger Households gain natural advantage in Tax rates, due to their less Income, lower Average of Incomes, and thereby, lower estimates of Lifetime income. The Series Index actually favors lower Incomes of all types, possessing lower range data fields. Tax Rates could be set based upon the needs for revenue by the Government, not by attempts to achieve political support, or to keep the Poor afloat. Government Welfare payments could be included in the Average of Income, and become a factor in Tax determination. Tax rates can be made truly Progressive, where better capitalization of Households are factored in, along with State and Local taxation. Higher financial status will be taxed at higher rates than lower financial status, but with realistic Tax rates; all forms of Income to be considered Equal, and assessed the same. The Result would be a justified Tax impact.
Computers allow for Series indexing, and requires far less input than does the mydraid level of current Tax provisions. Base Tax rates will be easy to impose by Congress, and easy to determine by Tax Assessor. Taxpayers could easily find they have to pay less Tax when their Expense levels are high, and find their Tax assessments to be less impactive as they attain higher Income levels. The greatest benefit could be that common Taxpayers may again be able to fill out their own Tax Returns. lgl