I have read this article, and now wonder how We could have gone so wrong. I started thinking on the issue, and decided Government was not only going to continue borrowing, but have to pay Interest on that borrowing; this meaning nothing at present, though most important when Creditors cease to desire Us so highly. I contemplate the Tax Code, and think as how no real revenues will ever be raised under such a mishmash of nightmare regulations. It is time for Change, and I mean real Change!
I continued my Thought, and decided it was time to set up a rational borrowing system. Suddenly, a great Light did appear in my head, even if Some could confuse the result with adverse effects of alcohol–though it is morning, and I have not been drinking. I decided We are taking exactly the wrong course in the collection of taxes, and also in the payment of Interest on public debt. We are letting a considerable number of exterior organizations make a substantial amount of Profit from our Confusion. I studied on the issue, and here is a list of proposed Changes:
1) I would first decree that all Income coming to any Individual or Organization be deemed simple Income, no matter How derived. There would be only Income; Capital Gains, Inheritance, etc. would be taxed in one and only one way.
2) There would be a set flat Tax–I would suggest 21% which must be paid by Everyone–Rich or Poor. There would be no Tax Exemptions or Deductions at this Point at all–meaning that the Tax would be collected. This is what will be collected at this Point, actual Tax rates could be higher. There would not even be a personal deduction allowed, special deductions for Children, any cut rates for marriage, or allowance of any type for retirement funds.
3) Is the entire Taxpayer World up in arms at this Point? This is where I set the Hook by the way! All of these tax allowances will still exist, but only come to the fore with the filing of a Tax Return. Everyone can file away claiming any and every deduction they can think of, and the IRS will not only return the desired funds, but an Interest rate on those funds equivalent to the federal Overnight rate for the entire Period before of the funds.
Many great things will likely occur with passage of such a Tax law. Congress may think to revise many of the deductions and Exemptions which they have issued. We as a Government and Community would be far less dependent on exterior sources of Cash and Debt. The Fed might be more inclined to leave Interest rates alone. Taxpayers would find a lump-sum method of Savings, which they would be less inclined to blow on Consumption, or payment of Consumer Debt. Business would be far more discretionary about Capital Expenditures, knowing immediate access to funds are delayed. Further legislation would insist that Social Security (FICA) taxes would be maximized before Taxes were extended to the general fund–bringing security to the Social Security system. We all get benefits from the revision, though We would have less Cash to spend in the Short-Run; it is still returned in the Intermediate Period plus a Profit. lgl