Our current budget problems can be reduced to; what programs are worth the government funding, and who has to pay for them. Most Americans have no problem with the idea of helping the destitute and disabled. Many programs that do this are worthy of the financial sacrifice made by the more fortunate citizens. Keeping food on everyone's table and a roof over their head and medicine in their cabinet is a worthwhile goal of government. The rub comes when we have to decide who pays for it. The easiest solution is to put it all upon the taxation of future generations by borrowing and spending now...That option is about to run out..
The desire to make taxes painless and politically palatable usually leads to going after business.Since a business can not vote it is the logical solution. However a business has employees and stock holders ( mostly the 401ks of middle class workers ). Most businesses greatest expenses are salaries and benefits of employees. When a business is taxed it adds another expense and the employees and stockholders pay the bill with lower wages and less benefits. The alternative is to pass the tax on to the consumer in the form of raising the price of the product or service. This often reduces market share and gives an advantage to competitors usually based over seas where there are less taxes and regulations.
The next attempt is always directed at the prosperous. The people who have succeeded in acquiring wealth. They prospered through hard work, sacrifice, wise investment, or just fortuitous enough to have parents that acquired wealth honestly themselves. The problem with putting an unfair burden on prosperity is it diminishes the reward for education , hard work and effort. It also stymies risk associated with investment, especially in cutting edge technology... All is not lost there is a fair and equitable solution in funding worthwhile government programs.
In the current political climate there are plenty of politicians who build their careers on pandering to business and the rich, or playing upon the envy and jealousy of people towards those who for whatever reason are more successful than others. What we need is a system of taxation that does not open the door for the politicians who play one segment of our society against the other, or give tax exemptions and subsidies to their financial supporters.
The most obvious and simplest form of fair taxation that does not punish success, or put the poor and middle class at a disadvantage is a universal flat tax. If we are going to tax business at all, it is best to tax them in a way they can not lobby for exemptions or subsidies. An example: Five percent of net (period) without exemptions.The parameters that determine net income should be universal, for the self employed, to the largest corporations. This approach would bring stability and certainty and encourage investment while adding to and stabilizing our tax revenues. It also would let the free market determine the value of the product and the viability of the company, not the politicians making sweetheart deals with business for tax exemptions and subsidies.
The same is true for individual taxation. If the only exemptions from a five percent taxing of individual gross income are the number of dependents, politicians could not pit one segment of society against the other. If taxes are to be raised or lowered, all but the destitute would share the burden or benefit.( there should be exemption from income taxes for those below a realistic poverty line) ...There will be those who claim a flat tax is not progressive enough, the rich should pay a higher percentage. Five percent of 200,000 dollars is 10,000 dollars. Five percent of 20,000 dollars 1,000 dollars. If you make ten times more than your neighbor you pay ten times more. Anymore or any less would be unfair.... After a 1,000 dollar dependent exemption the person making 20,000 dollars would pay zero.The person making 200,000 would pay 9,000 dollars...If that is not fair, the problem is not with fairness but one of envy.
The percent is not set in stone, but if it raised or lowered universally for all citizens and businesses alike it takes out a lot of the rancor and corruption out of politics.If taxes are raised they are raised on everyone including those who support you politically. If we also were to have a enforceable balanced budget amendment along with a flat tax none of our national wealth would be wasted on servicing an unnecessary debt. It would also keep politicians from buying votes by offering government programs, tax exemptions and subsidies without raising taxes on everyone but their supporters. Interest on debt and foreign energy costs are driving us to the edge of bankruptcy..We can have a solid, effective social safety net, along with a second to none infrastructure, but we all need to equally fund and pay for them.
Low and fair taxes, and a certain and simple tax system not only will help our economy and encourage investment. It will provide the funds to pay for worthwhile government programs to improve the quality of life for all of us. A balanced budget mandate would insure our taxes went for the benefit of our fellow citizens, rather than paying interest to foreigners who hold our debt. If we all have a say, and share the burden equally, instead of having politicians pitting different segments of society against each other, and/or giving their supporters tax exemptions and special subsidies and benefits. The world would marvel how generous and prosperous our government and economy could be.
Wesley Jones
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