Tax Reform

 

 

"Income tax, sales tax, gas tax, property tax, wheelage tax, death tax - we have them all..."

I think there is one thing most of us can agree on. And this is something that many people on both sides of the aisle might shake hands on. Our current income tax structure sucks. Now people may think it sucks for different reasons, but like I say, many think it does suck.

I believe to fix it, we first need to explore the universe of ideas. All should be listened to, and then debated. Just kicking the can down the street with our current system will not work. I know many favor the fair tax. Others favor the flat tax. Both have merits, both have some inherent problems. So just for grins, I am going to put something forward that I have been thinking about.

Before I start to explain my proposed system, let me first do a preamble. As most of us know, our Federal Government does way too much. Too much it was never intended to do. Too much stuff the states should be doing. Too much stuff the private charities and churches should be doing. What we have ended up with is a bloated behemoth that takes a large and complicated tax system to feed. And lots and lots of cash (ours).

Therefore:

Charity or church - To keep the highly inefficient government from trying to act like a worldwide and national charity, you will have an option. Should you give 10% of your income to a legal and viable 503C charity (say a maximum of 5% administrative costs), or a legal church, your flat tax to the Federal Government would be 10%. Should you decide not to give 10%, your Federal Income tax would be somewhat higher.

Federal Tax - As previously stated, should you take the charity and/or church option, your tax would be flat at 10%. One page. No deductions, no credits.

State Tax - If we are going to honor the 10th Amendment (States Rights), the states must also take back many of the tasks the Federal Government is now doing. We need to decentralize government as much as possible. Even if we put the state governments on a strict diet, there are still services which need to be done - especially if the states are taking those back from the Federal Government. The state tax should also be flat at 10%. One page. No deductions, no credits.

Local Tax - Again, to practice decentralization of government, many of the tasks the state performs can be flowed down to the local (county) community. Property tax would be flat at 10%. This tax would take care of country roads and bridges, schools, law enforcement, fire and emergency services.

Here is the sweet spot in the deal. Some might say, "Holy cow - that is 40% of my income!" True, it would be. But there would not be a nickel of tax paid on ANYTHING else. No gas tax, no sales tax, no liquor tax, no cigarette tax - nothing. Try to figure out sometime how much tax you really pay with ALL taxes taken into consideration. It is whopper.

Okay. I know I am going to take lots of shots over this one. But that is good. It will keep the conversation going. The IRS has had it's day and needs to be put to bed. Our current tax code is convoluted and we now know, has been used as a political weapon.

I am not married to the 10-10-10-10 idea. However, consider it a straw man. But it is an idea. We need to keep the conversation going at the grass roots level. And we need to hear some fresh new ideas coming out of our elected officials on fixing our tax mess. Not tomorrow - today.