New Tax Policy

Lori Montgomery wrote a good article in the Washington Post about the Budgeting process. She semi-states that Representatives and Senators refuse to accept the lack of tax revenues when their own preferred programs are threatened with reductions. What is the real problem? It is not the extremism of the Tax Code, quite the opposite: there are too many modifications to the Tax Code so that real tax revenue is not generated. The Republicans are worse than the Democrats–one time Republicans were giving back Rebates on Taxes which had not been paid in the first place–but Democrats think tax revenue shortage should never prevent social programs.
Which is the worst of the Two?

I am currently hawking the purest simplification of the Tax Code. I would charge individual Workers $1 per hour of Work. The first $1400 of each Worker’s tax payment would be devoted to Social Security contribution. Business Tax would be $4 per hour for all Labor worked, including their own self-employment. The Capital Gains Tax would be $1 per Thousand Dollars, the Tax assessed with each Transaction transference to a Monetary sale, and charged both Sides of the transaction. There are to be no Exemptions, Deductions, Tax credits, or place for 401(k) style Tax shelters. The Taxing Authority will not recognize whether Anyone is making a Living or not, so therefore, Everyone will get on quite well.

Such a Tax Policy will eliminate Constraints on Work Incentives presented by any tax, the main howl of the Republicans. The Tax Code would raise a definite expected Tax revenue level, and legislators cannot confuse with artificial expectation of economic expansion generating real new tax revenues. Democrats and Republicans will not be able to pretend that the funds will be there, if they will not be. I would hope that Inheritance Tax will be retained, but remain equal to the new Capital Gains Tax of $1 per Thousand Dollars (simply adjudge that a monetary transaction had taken place). The real gain of the new Tax Policy would be that it would generate real tax revenue of magnitude acceptable for Government operation while limiting Government excesses, and bring reality back to the Budgeting process. lgl