Thursday, July 12, 2012

WSJ: “A Simple Tax Code Is a Fair Tax Code?”

Who knew!?

Chicago PM Tuesday 19 June 2012

Editors, The Wall Street Journal


The Wall Street Journal article   “A Simple Tax Code Is a Fair Tax Code” could be the most inviting title of any article ever appearing in the Wall Street Journal.

And it invites an immediate answer: How about a single tax rate? 20%?

That would still be hard on low earners: 20% of $20K/year? So have a single exemption: The first $20K/year would be tax-free.

What would be taxed? Leave the Constitution alone for now – tax income. All/any income. The federal government needs taxes for a single purpose: Pay for the operation of the federal government: Military, President's, Congressional salaries, federal government real estate. But they should not be used to influence voters' activities. Wages, investments, whatevcr – all taxed at 20%. If wage earners would like to live on investments, let them save their wages to buy such investments.

Stop multiple taxation of the same money – no taxes on corporations (are they not people peaceably assembling...?) their stockholders are paying taxes on the same earnings.

How to define income? Money you have today that you didn't have yesterday is income. Companies would still report how much dividends they are paying to stockholders. Employers would still report to the feds how much they are paying people, but the people would be writing the checks. Yes, no more withholding. Another dividend. Think of the attention voters would spend on who to vote for federal office with visions of those monthly checks they'd been writing in their heads.

Illness, catastrophic losses, see your local insurance agent, before it happens.

The author starts to waver at the end, suggesting maintaining “a level of progressivity.” The problem with that is it is so inviting to government bureaucrats: Hey, the rich are already getting a break, they'll never notice a little progressivity. The problem is, if you keep this up long enough, you eventually get everyone ending up w/ the same spendable income. It's been tried in Soviet Russia and North Korea.

Arnold H Nelson

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