Friday, February 26, 2010

Anyone want a new Tax policy?

Everyone who knows me understands about my getting up on the wrong side of the bed sometimes (Some say more than half the time). I read this Piece by Cathrine Rampell, which is really very good–especially the link to Bartik’s Piece, and growl to myself. It is all because Americans approach the Tax issue in the wrong manner and direction. We start out assessing massive tax rates, then start giving Exemptions to that Tax to Unknowns; never considering Who we are giving the Exemptions too, or really understanding how much these Exemptions are going to lessen Tax revenues. It is not the way to do things, and WE ought to have more sense.

I personally favor a Universal Tax, applying to All, not matter what is the source of the Income. It is all thrown into the Pot, whether it is labor Income, Capital Gains, Rents, Royalties, Welfare subsidies, or Inheritances. I would set the tax rate payable at $300 per $10,000 earned per year. There would be no Exemptions of any type, except for Proof that Expenses were in excess of the amount left after the Assessment of the tax; with the Expenses allowed pre-set by law under the tax authorization. Living Expenses would be at set amount per individual in the Household, with proof of that Expense at a Tax adjustment hearing. Every other Expense would be limited in amount, and must be proven upon Tax hearing. The entire Concept behind my proposal would insist that the Tax is owed, and failure to forward the set amounts of Tax expresses a personal or business inefficiency from the Taxpayer.

Everyone will start to whine now that the Tax is too harsh. I would disagree! We have a definite limit on the amount of Tax which can be assessed, with no likelihood that the Tax will be increased. We have adequate Revenues, and the least impact on Business performance; because such a Tax easily transforms in character to an ordinary business expense. The Public Forum will have an understandable level of Tax Income for Government, and thereby, a base of resistence to excess Government Spending. Constraints are placed on both Politician and Special Interest without Taxpayers actually paying much more, or being charged with unknown taxation at odd moments without notification. The whole process becomes understandable to All, and Rent-seeking becomes extremely difficult. The only final Question to be answered is How such a regular and uniform tax policy will affect the economy; the answer is probably far better with less adverse impact than designed political economic policy. lgl

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