Saturday, November 12, 2011

My Proposed Tax Plan (it can't be worse than what's already proposed)

If you ever tune into the news on tv or listen to it on the radio, I am certain that you have heard the recently proposed tax plans from those in the Republican party who are seeking the presidency.  You've most likely heard about Herman Cain's and Rick Perry's flat-ish tax plans.

If you have not yet read (or heard them talk about) their plans, they will make great bathroom reading materials--the stink from those plans will match the bathroom ambiance.

Anyway, when I first heard about those plans, I thought to myself, "Those plans suck. All they do is benefit the rich, and nobody else. Why don't I see if I can come up with something a little more fair."  So I did.  And this is what I came up with:

The 25 Slide Tax Plan

Looks pretty slick so far, huh!  Anyway, I've put together a video with slides for the basic elements of the plan on YouTube, so I'll embed it below.  Watch it and see how much better it is than the other plans:

So the entire basis of this is to screw all parties over.  Okay, okay.  That sounds completely harsh and like it won't work.  In reality, it will work because it is not favoring one faction over the rest.  There would be a 20% income tax levied against all wages, a 5% sales tax on all goods and services, and a 0 - 60% corporate gains tax on all investment income.

Sure, the income tax would be lower for the rich than currently, but since they make most of their money in investments, they would pay an overall higher tax.  That is because the higher their corporate gains income, the higher tax rate they would pay on that income.  Their overall tax rate (income and corporate gains) would increase from less than 39% to about 45 - 50%.  That would bring in much more income than currently.

Some might ask: But wouldn't the rich leave the country in droves, or not invest anymore?

What country gives them such benefits that this country does while asking so little in return?  There is no other country in the world that provides so much for them.  Most other countries in the world would require much more in taxes and bribes from them, and their safety (kidnappings, burglaries, murders, etc) is much better here than in other countries.  As for not investing, they would never do that.  The return is much higher than doing anything else.  If they put their money in a bank account, they would only get a return of about 1% annually.  Even with 60% taxes in place, their investments would still garner a respectable 6% net gain.  Those concerns are really non-issues.

The rich would be forced to pay higher income taxes than what they are used to, but in reality the only difference between what they pay now and what they would pay is about 5%.  The taxes in place now are high enough that it would not be much of a tax hike to increase it by that amount.  The only issue is that it would be more of a burden on them.

I would make a comment about the middle class, but there really isn't a middle class anymore.  I guess there might be, but it would be a regional middle class.  That would differ from one part of the nation to another.  For instance, middle class in California or NYC would be considered rich in Nebraska or Oklahoma, and middle class from Nebraska or Oklahoma would be considered poor in California or NYC.  It is a convenient term which cannot be quantified, but allows people to think that they are in a position where they are better off than the poor in one community and not as well off as the rich in another community.  In that sense, we could say that the USA is middle class.  We're not as poor as Sudan, and not as rich as Luxembourg. (This is based on a per capita income).  This plan doesn't really address the middle class because there really isn't a middle class--just the rich and poor.

So, yeah, it would punish all classes.  It would place higher burdens on those of all classes (higher income tax for the poor; higher capital gains tax for the rich).  It would make it so everyone would be angry.

But I look at that as fair.  There wouldn't be any individual group that is not punished.  We would all be punished together.  We would not be able to say that one group is being favored and that the other group is being screwed.  We would all be in the screwed together.  And in a way, isn't that what we need right now--solidarity?

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