Rigorous Tax Law

This NYTimes article focuses on the failure of Democrats to divorce themselves from the Republican mode of discussion on the issue of Taxes. Democrats are still responding to the Republican rhetoric, rather than resetting the terms of the Tax negotiation. This failure will devolve into less Votes at the Polls. Republicans are talking about the expiration of Tax exemptions as a vast Tax increase, for God’s sake! The Tax Cuts would not have had an Expiration Date in the first place, if they had ever been contemplated as a permanent fix of the Tax Code. The Cuts were to be a temporary economic incentive package, with follow-up Tax legislation to provide long-term reordering of the Tax Code. Democrats had better start thinking about a permanent Tax Code, before they lose another Election.

A first Step which might be taken, and thereby advocated, would be the realistic unification of the Tax Structure. Why? The Answer states the Tax devolves into the simple Withholding Tax, whose Proceeds distribution can be turned into an internal function. The rationale here stands that Tax rates can be simplified into percentage rates of Income. There will be no Combination Punches exhibited by the Tax system; Everyone can determine how much Tax must be paid, irrespective of knowledge of revenue destination. I would even suggest negotiation of Tax law with the State and Local Governments to eliminate their forms of Income Tax; to be replaced with a Federal distribution program, leaving Federal economic policy to set levels of Income taxation.

Readers may ask why I think this is important? The Answer stipulates that We can introduce uniform rates of Taxation upon all forms of Income, and vary those uniform rates solely on the base of Income size (reintroduction of progressive taxation). We eliminate the distinction between Income and Capital Gains etc., and will later remove the related Tax exemptions tied to those distinctions; this later essential for an overall reduction in actual Tax rates.

Setting Tax rates become simple thereafter: I would suggest an range between 12% through 35% for all Income. This would easily pay for the Expenses of excessive Government Spending on all three levels of Government, if We could enjoin lawmakers to follow a Budget process. No one would get out of paying Taxes–as is now allowed in the lower reaches and in the extremely high reaches of Incomes.

The Fund Allocation process becomes even simpler: The first 8% of all Tax revenues goes to Social Welfare programs (Social Security, Medicare, possibly universal Health Care), the next 2% goes to Local Government, the following 2% of tax revenues goes to State Governments, and the rest goes into the Federal General Revenue Budget. State and Local Governments supplement their revenues with Property and Sales taxes, and the Federal Government utilizes Excise Taxes. Tax Exemptions and Tax Credits should be eliminated, except for the general Business Expense allowances as existent in 1960. This is how We go forward into a Balanced Budget format with limitations on Government Spending at all levels. lgl