During prime election years my thoughts often turn to solving/griping about how things are. I wouldn't call myself a big-picture guy when it comes to politics, but I have my moments (in my own mind). One particular item I tend to contemplate is the tax code of these United States. As it has grown over the years it has become a cumbersome mess. It's time we fix it.
The biggest issue is how to be fair. No matter what one proposes, someone else won't like it. The 'poor' won't like what the 'rich' get and the 'middle class' (of which I am a member) won't like what either of the other groups get. Many ideas have been floated with much or little fanfare, yet here we sit with a tax code so complicated that no one person could possibly know half of it.
Here's my thoughts.
Institute a 'semi-flat' tax. Pick a percentage, I'll go with 18. That's higher than some want but less than others. There would be some deductions across the board that each group would be able to take. I would list them as a dependent deduction, homeowners and medical. No matter what your level of income you face the same tax rate as everyone else. There should also be some manner of business deduction if you are the principle owner of a business and you are investing your own money into that business. (This is where I would have to leave it to the accountants to hash out the details). The one thing I would not include as a deduction is capital gains. It's income, plain and simple. At that point you are not investing in creating jobs you are building wealth for yourself. Capital gains should be taxed the same as any other income. Why? It's just income, why does it matter where it came from?
I understand others won't like it if the poor are taxed, but they use the services of the government just like everyone else, and often are the heaviest users of those services. At some point there can be a floor where there is no tax but that floor should be low enough that no one would want to be there. Although our government spends much to much and they should have their hands slapped, everyone needs to pay their share, rich or poor, no hiding money through sheltered funds or investments or other 'accounting tricks'. If you want more wealth, earn more. If you don't want to pay the taxes, move to another country. I hear Greece is currently looking for investors.
And just in case anyone wants to know, this ramble has been penned without the insight of whether my own taxes would go up or down using this scenario. Besides, My Beloved takes care of all that. I just sign what she tells me to.