Taxes

Obama's Phony Tax Reform

The president's proposals would make a brutally byzantine system more complicated.

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In his State of the Union address last week, President Obama used billionaire investor Warren Buffett's secretary, Debbie Bosanek, as a prop to illustrate the unfairness of our tax system. "Right now," he said as Bosanek sat near first lady Michelle Obama, "Warren Buffett pays a lower tax rate than his secretary."

Commentators spent the next week speculating about what Obama meant. Was he referring to marginal rates or effective rates? On taxable income or adjusted gross income? Was he talking about federal income taxes or payroll taxes as well? If the latter, was he counting the so-called employer's share or just the employee's share? What about state income taxes?

As is often the case with taxes, things got complicated pretty quickly. Much of that complexity is unnecessary, and it helps explains why taxpayers dread this time of year, when they start pulling together the evidence they need to make their case to the IRS: Take my money, please, but don't peruse, penalize, or prosecute me. The headache-inducing complexity of the tax code is also a major reason for the unfairness Obama decries. Yet the policies he recommends would only make the problem worse.

There seem to be two main factors that explain why Bosanek pays a larger share of her income in taxes than Buffett does. First, she earns a salary, while her boss's income consists mostly of dividends and capital gains, which are taxed at a lower rate. Second, payroll taxes are assessed on just the first $100,000 or so of income.

One possible response is to raise the tax rate for dividends and capital gains so it is the same as the rate for wages. But there's a strong argument for reducing the rate, currently 15 percent, even further—all the way to zero, since these earnings either already have been or will be taxed as corporate income. Indeed, Harvard economist N. Gregory Mankiw argues that Buffett underestimates his tax rate because he does not take into account the corporate taxes he pays indirectly as a shareholder.

As for payroll taxes, Buffett is right when he says they are highly regressive. But instead of raising the "wage base," why not abolish the taxes? Congress spent Social Security's surplus on other things for many years, and now it has to put money back into the program because annual payroll tax revenue no longer covers benefits. Pretending these are separate piles of cash serves only to obscure our tax burden and the federal government's fiscal condition.  

Obama's idea of "tax reform," by contrast, is the "Buffett Rule," which says "if you make more than $1 million a year, you should not pay less than 30 percent in taxes." This is just a new wrinkle on the alternative minimum tax (AMT), which the national taxpayer advocate calls "the poster child for tax-law complexity," the "most serious problem facing taxpayers." The AMT, itself grotesquely complicated, was a response to the complexity that allows rich people to avoid taxes. It has morphed into a covert mechanism to spring tax hikes on people who are decidedly not rich.

The AMT encapsulates the problems with a system so byzantine that even Mitt Romney, a wealthy, financially sophisticated guy with plenty of expert help, can't figure out how much he owes. New York Times financial columnist Floyd Norris reports that the Republican presidential candidate overpaid by about $44,000 last year because of a capital gains miscalculation.

Yet in the same speech where Obama condemned the "loopholes and shelters" that rich people use to avoid paying their "fair share," he promoted policies that compound the complexity, including special breaks for college students, "companies that hire vets,"  "small businesses," "high-tech" manufacturers, "clean energy," energy-conserving building improvements, and "companies that choose to stay here and hire here in America." This insistence on using taxes for economic meddling and social engineering has made the system the hideous mess it is today.

Jacob Sullum is a senior editor at Reason and a nationally syndicated columnist. Follow him on Twitter.

© Copyright 2012 by Creators Syndicate Inc.

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90 responses to “Obama's Phony Tax Reform

  1. Politicians cannot simplify the tax code. It stands as the go-to platform for purchasing votes and donations.

    “Elect me and I will give you add a page or two to the United States Tax Code on your behalf.”

    1. It’s also one of the go-to threats when dealing with businesses or industries.

      “Nice little tax breaks you got here; be a damn shame if something happened to them!”

    2. The complexity also means that anyone can be in violation of the tax code at any time thereby ensuring those with something to lose will attempt to curry favor with the right politicians.

      1. “That’s a nice business you’ve got here. Wouldn’t want to see it audited now would we?”

        1. @ Fist, Salt, Bee, & sarcasmic: Well said. The thing (well, *one* thing) that drives me up the wall is the perennial lip service given by all “concerned” to “fixing” the tax code.

          1. As used by a politician, the term “fix” shares pretty much the same meaning when uttered by bookies, gamblers, and mobsters!

      2. It’s true. Who knew you were supposed to pay taxes on all that shit.

    3. “Elect me and I will give you add a page or two to the United States Tax Code on your behalf.”

      That’s Democracy.

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  3. Are they that stupid, or do they think we are really stupid? Buffet’s company pay corporate taxes – the highest in the world. The IRS is currently suing them for over a $Billion in back taxes.

    Then Buffet pays himself a relatively small salary which is taxed again. This doddering old fool and his frumpy secretary are trying to sell us this load of crap without any actual numbers.

    1. He may be a lot of things, but he’s no fool. Buffett knows exactly what he’s doing, and it has nothing to do with making the tax system more “fair.”

      1. Are you sure? He seems like an idiot savant – one of the greatest stock pickers ever, but unable to do basic shit like drive a car.

        1. My best friend in college never drove. He was eccentric, but no idiot. It certainly wasn’t from lack of coordination or concentration.

          1. Buffet is no idiot, but he certainly is a fool.

        2. Do you get the Reason mag? They have a good article on Buffett in this month’s edition. Buffett is not an idiot. He stands to make a lot of money from the policies he’s pushing from life insurance and estate auctions.

        3. Don’t forget – it always pays to fellate the ruling class.

          Or is he the puppet master and Unicorn Barry is the puppet?

      2. Buffet’s comments previously about higher taxes were self-serving when he was talking about the estate tax. They’re doubly so now that he’s talking about increasing capital gains taxes. What a piece of shit he is.

    2. Are they that stupid, or do they think we are really stupid?

      Yes?

    3. “Are they that stupid, or do they think we are really stupid?”
      Yes, and in most cases they are right!

  4. One possible response is to raise the tax rate for dividends and capital gains so it is the same as the rate for wages.

    another is to lower income tax rates to 15% to solve this urgent unfairness.

    But I’m guessing Buffett’s secretary pays the same capital gains rate Buffett does.

    1. Value and length of time held determine the rate.

      1. But so does your marginal income tax rate. There is actually a 0% tax rate on divs and cap gains if your regular income tax rate is low enough.

    2. I would love for a liberal to explain to me how dividends paid on a stock that’s lost half its value is “income” in any meaningful sense. Take GE as one example. If you bought it in mid 2008 you probably paid about $33/share. Since then, based on today’s prices, you’ve lost about 40% of your money. Yet Obama wants to tax this losing investment as if it is adding to your wealth.

      The risk of stock ownership plus the fact that the income is already taxed twice makes dividends completely different from ordinary income and fully justifies it being treated completely differently.

      1. That’s the funny thing. I was talking taxes with some of my friends yesterday, they were asking a bout reporting interest, it was a negligible amount on their bank account, so I told them that if I were them to not report it because the goverment has no right, in principal, to interest on money that has been taxed, especially when they do not take into account the loss of real value due to inflation. That part floored them when I explained it in depth. That you could have seen a nominal gain but still have your real value of your assets may be less than what you paid for in real terms because of inflation, but the goverment would still tax you on the nominal gain like you actually made any money.

        1. yawn

      2. Sales tax: If a company buys goods, they’ll pay a sales tax; they then produce new goods which are sold, and the customer pays another sales tax.

        Estate tax: If a person leaves property to his son, the son will pay an estate tax; if the son leaves that same property to his son, he will pay another estate tax.

        Income tax: If a worker receives wages, he will pay an income tax; he will then give that money to a company which pays wages; the worker receiving those wages pays another income tax.

        One can disagree with the general idea of taxation, if necessary. But since most people accept the general idea of taxation, they must accept that any form of taxation will necessarily involve the same money being repeatedly taxed. That’s how an economy works; money is shuffled around and taxed along the way.

    3. Actually, she may pay a lower capital gains rate. It does go all the way down to zero (temporarily) if your regular income is taxed at a lower rate – I believe it’s 15% regular marginal rate.

    4. another is to lower income tax rates to 10% to solve this urgent unfairness.
      There much better.

  5. New York Times financial columnist Floyd Norris reports that the Republican presidential candidate overpaid by about $44,000 last year because of a capital gains miscalculation.

    Turns out that’s the break-even amount for keeping the tax code complex enough to cause mistakes like this.

    1. That is a rounding error – like me overpaying by $20.

  6. Some economists favour a neutral tax system that does not influence the sorts of economic activities that take place. Others favour using tax, and tax breaks, to guide economic activity in ways they favour, such as to minimise pollution and to increase the attractiveness of employing people rather than CAPITAL

    1. Your ideas intrigue me I’d like to subscribe to …….

  7. How much income did she earn? Will she show us her tax form or her taxable income? The Buffert rule whats in it for him ? Thats the real question i would like to know ? AN thier is no way he cares about fairness.

  8. Serious question: Why should (income) tax be a *rate*? Wouldn’t it be “fair” to have a fixed price of admission to the American club? There could be discounts for poor people or whatever, and philanthropists could pick up the tab for folks they pity. But ordinary citizens would plop down their annual fee for the buffet. Who know? Government spending might even drop, given such an approach.

    1. Government spending doesn’t drop, it just doesn’t increase by as much some years.

    2. We know that the rich don’t pay their fair share because they are rich.

      If they paid their fair share then they wouldn’t still be rich.

      Therefore taxes must be raised on the rich, simply because they’re rich.

      When they aren’t rich anymore then we will know that they paid their fair share.

      Taxes are about fairness and equality, not funding the government.

      1. Taxes are about fairness and equality, not funding the government.

        I disagree. They’re about punishing the evil rich for, you know, being evil. And rich. When you aren’t rich you aren’t evil anymore.

        1. That’s what I said. Fairness and equality.

          It isn’t fair that the rich are rich and that there aren’t equal outcomes for all.

          Taxes fix all this.

          1. But.. If I’m not rich and still evil should my taxes be raised out of fairness?

            1. Or is being evil simply a symptom of being rich? Damnit, I am confus.

            2. If you are evil then chances are you produce more value than someone who is not.

              That extra wealth shall be confiscated in order that good slovenly folks can watch cable on a large flat screen.

    3. Rich people gain more from the American Club than poor people do though. Each person’s life is equal, but America also protects your possessions. That’s one reason why I prefer a flat consumption tax.

      1. I see what you’re saying but I’ll offer this in rebuttal: Club America protects everyone’s stuff equally. It might seem like the rich benefit more, but I think that’s simply a function of them having more stuff to protect. So Rich’s proposal for a flat fee still makes sense in light of this. Furthermore, the rich have the means for private “stuff protection” if they desire, so it shouldn’t be assumed that “the rest of us” are all chipping in for their benefit. Or something like that.

        1. By that logic, insurance companies “protect everyone’s stuff equally”, so everyone should pay flat insurance fees. That is obviously unfair to those who have nothing. The main difference is that those who have nothing can choose to not have insurance. They can’t choose to not join Club America.

          An alternative would be to have the government charge a flat fee for protection of life and then let people protect their property through non-governmental means… But often protection of life and property go hand-in-hand, so it might be hard to seperate the two.

      2. Or, to put it another way:
        “Pay me (more) taxes and maybe something doesn’t happen to all that nice stuff you got there.”

  9. “Yet the policies he recommends would only make the problem worse.” – An accurate assessment of the entire obama presidency.

    “This insistence on using taxes for economic meddling and social engineering has made the system the hideous mess it is today.” – Using the means of funding the government as a tool for social engineering is the root of the problem. The freakin’ government has no business engaging in social engineering in the first place.

    1. You know who else used the government to engage in social engineering?

      1. Name a govt that hasnt. The temptation is apparently irresistible to Top Men, narcissists, Our betters and control freaks of any stripe. Rather than doing the job the government was formed for initially, social meddling becomes the primary mission.

        1. People seek power so that they can wield it.

          What’s the fun in having the ability to do things and no one stopping you if you don’t use it?

          1. Remember that fucked up movie “8mm” with Nicolas Cage? The one where he’s a private dick who was hired to see if a snuff film made by some rich old fuck was real?

            Not the best film by far but my favorite scene in the whole thing was where Cage had finally confronted the snuff makers lawyer and demanded to know why he made it:

            Cage: Why did he make this? Why would he want a film of a little girl being butchered?

            Lawyer: Because he *could*!

            It was just a movie but the motivation of far too many people follows this exact same line of reasoning.

            1. Yeah I saw that movie. It sucked. Fuck you for making me remember it.

              1. Sorry. I hated the whole thing but that scene I always felt was worth remembering.

  10. This insistence on using taxes for economic meddling and social engineering has made the system the hideous mess it is today.

    This hits the nail on the head. If we’re going to have an “income tax” at all it should be used for raising revenue to support government spending, not for social engineering or influenceing behaviors that the government wants to promote. A simple 15% flat tax on all sources of income above a certain threshold (maybe poverty level +50%?) would do. Preferably a tx rate of 0% would be even better, but with $15 trillion in national debt that’s a non-starter for now.

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  12. This article makes a lot of sense. That’s why there is not a hope in hell anything in it will ever be implemented. Despite the fact that 85% of people agree the tax code is too complicated and even the OWS people have this mostly right.

    Ignorance is a powerful force.

  13. Most people don’t pay taxes or don’t make enough money to experience the full glory that is the IRC. It will never get fixed.

    1. Actually, people who qualify for the earned income credit, etc. face a pretty complicated set of rules. eg, supporting your drug addicted sister’s kid qualifies you, but raising a younger cousin doesn’t. And don’t get me started on common-law marriage and the various tax breaks involved. It ain’t easy for anybody, except 1040EZ filers.

    2. Try Being self employed no matter how little you make you have to comply with all the rules and pay twice as much. I’ll give you an example. A friend of mine on Unemployment made more money than I did as a self employed person. He owed the IRS $1000 in taxes but I owed the IRS $6000 just because I’m self-employed. I would have made more money collecting unemployment except the self-employed can’t collect unemployment.

      1. Sounds to me like you’re the chump. It’s almost like you’re trying to be productive or something…

      2. Similarly bad in Canada.
        Self-employes pay double the payroll-tax deductions as the employed do. And we’re not eligible for unemployment insurance. And if you’re not eligible for unemployment insurance, you’re not eligible to visit the Unemployment Office to access job postings or govt-sponsored retraining.
        In other words, once you get off the regular-employment train, you still owe the govt, but you get cut off from the related services.

        1. Solution: Incorporate and employ yourself as manager or whatever. You’ll pay unemployment insurance tax, but when the business goes under (which must be why you were hoping to get unemployment benefits), close the business and lay yourself off. Voila!! 99 weeks of vacation at taxpayer expense!! Enjoy!

    3. Most people don’t pay taxes or don’t make enough money to experience the full glory that is the IRC.

      When did internet relay chats become part of the discussion?

  14. Yet in the same speech where Obama condemned the “loopholes and shelters” that rich people use to avoid paying their “fair share,” he promoted policies that compound the complexity, including special breaks for college students, “companies that hire vets,” “small businesses,” “high-tech” manufacturers, “clean energy,” energy-conserving building improvements, and “companies that choose to stay here and hire here in America.”

    This is really Obama’s biggest problem, along with a lot of other left-wing technocrats–they believe that adding greater complexity and centralization to a system will increase the productivity and efficiency of that system on an exponential basis. They believe that Chuck Spinney’s “Plans/Reality Mismatch” applies only to the Dept of Defense and not any other government institution.

  15. Blah blah blah blah. “Complexity” isn’t by itself a problem, unless your problem is that you are simple. I just wonder when complaints about the tax code will not happen to coincide with the goal of making life even better for the ultrarich.

    1. Blah blah blah blah.

      That’s the most sophisticated response you’ve ever produced.

      “Complexity” isn’t by itself a problem, unless your problem is that you are simple.

      The issue isn’t “complexity by itself,” it’s the increase of complexity that’s the problem. Perhaps you’re too simple to understand that.

      1. Not to mention that the “complexity” creates a byzantine framework of special rules, loopholes, and back door subsidies that “the rich” and “the corporashunz!!!” use to get out of paying their “fair share”. You’d think that lib-tard simpletons would be all about fixing that (not in the same ways that people with functioning brains would, but still). I guess I should know better than to expect consistency from those types.

    2. Let’s assume that we (libertarians, particularly the ones who frequent this site) really do want to “mak[e] life even better for the ultrarich” as you implicitly accuse, and that’s our true ulterior motive. I have to assume that you, on the other hand, want to make life worse for the ultrarich, or at the very least not see it be made any better. Isn’t your goal much less noble – I might even use the word sinister – than ours? Can we cast you as a bad person for wanting that, or at the very least somewhat misanthropic?

    3. 1. The more complex a tax code is, the more it costs (both taxer and taxee) to insure compliance. Those resources (time and money) produce nothing and therefore are wasted.

      2. The more complex a tax code is, the more avenues there are for people to avoid taxation. This preferentially benefits the rich because they are usually the only ones paying enough taxes to make tax avoidance worthwhile.

      Simplifying the tax code would benefit everyone except politicians. Why do you like politicians so much, Tony?

      1. insure => ensure

      2. Simplifying the tax code would have a negative impact on accountants and attorneys, too.

  16. Commentators spent the next week speculating about what Obama meant.
    —————————-
    if true, then commentators are beyond redemption. Obama meant this: “the American people are too stupid to get the difference between the rate on capital gains and the rate on salaried income. That means I can snow them into believing that folks like Buffett are getting over. You can never go wrong pandering to the stupidity of a large part of the American electorate, including the pundit class.” That’s pretty much what he meant.

    1. It goes without saying that capital gains are a more virtuous way of making income and thus should be taxed less than people actually working?

      1. No, they should be taxed at the exact same rate; zero.

  17. Everything about Obama is phony.

    1. Even the phoniness?

  18. I really wish we could have a legitimate conversation about the very concept of taxation of income. Taxing the labor from one’s own body like a we’re all sharecroppers – and throwing us in jail if we don’t comply – is inherently immoral, yet in this country we never even argue the premise itself, just the rates.

    What’s truly fair – and just – is no income tax at all. At least a national sales tax or standalone VAT is optional and avoidable to a degree. To argue about what rates are “fair” is like the proverbial “a little bit pregnant.” There is no such thing.

    No one in America is truly free when Uncle Sam in essence owns us and gets a cut of everything we do.

    1. ^Could Texas please invade Canada and free us from our oppression? Alberta is already on your side, so form your base there and spread out. Focus on the hippie left in British Columbia in the early phases. The Prairies are under-populated so easy to deal with. You’ll face some opposition in the Greater Toronto Area but by then your ranks will have swelled enough to overwhelm the leftish rump in this country’s central pimple.
      Thanks in advance.

      1. Focus on the hippie left in British Columbia in the early phases.

        I know from personal experience that they might talk the hippie left talk here in BC but they certainly don’t walk the walk.

        The sheer amount of rent-seeking going on in the name of “caring” is staggering.

  19. Kinda makes you wonder dude.

    http://www.puter-privacy.tk

  20. Posted elsewhere, but in view of Obama’s continuing obfuscation on the subject, I believe it’s worth another try.

    WE NEED A PLAN TO REFORM TAXES AND ENTITLEMENTS

    What is, to YOU, a fair tax plan? How can “entitlements”, including welfare, Medicare, Medicaid, and Social Security, be improved and made sustainable? Consider these ideas and please tell me your thoughts on them. You can make this plan even better, and you can send it on to your Senators and Congressmen to influence their votes. America needs something better, something more honest, and above all something we can all understand. Please send your thoughts to me too.

    Tom Beebe -or- tbeebe6535@yahoo.com
    3911 Wenzlick Avenue (I can send you the tax return
    St Louis MO 63109-1255 form as an Excel spreadsheet)

    This is a proposal to replace all federal taxes and transfer payments, also known as “entitlements” with a single act. Please understand that “all federal taxes” includes many that we pay each day, such as the tax on each gallon of gasoline, or the corporate taxes which are paid each time you purchase a product or service from a corporation; where else but from you, their customer, do corporations get money to pay taxes? Furthermore, these taxes are multiplied many times on their way from the source of the product to you. Taxes are paid by the retailer with whom you trade. He, in turn, pays his supplier taxes as part of the price of his purchases, and on down the road. You have a right to know, and will be astonished to know, how much you are paying in taxes. This plan is an attempt to reveal that amount by consolidating all taxes into one payment. Remember that by eliminating the hidden taxes, the cost of your purchases will come down drastically. This is one of two ways this plan is aggressively “progressive”, a term describing taxes which are easier on the lower income households who spend a greater part of their income. The second element of this “progressivity” is the large personal exemptions.

    The annual personal exemption is set as 2000 times the minimum hourly wage (2000 = 50 weeks times 40 hours per week). We have adopted a minimum wage as the least a worker should receive for his efforts. How, then, can we justify taking some of that sum from him in taxes? This exemption is allowed for every adult (20-65) in your household, and is reduced in steps for those younger, and increased in steps for those older, recognizing the differences in the cost of living to these on the opposite ends of the age span. This formula may be too much or too little as the economy changes, so the plan requires Congress to reset the wage each year, In that “resetting”, Congress will be determining the federal budget, which will be forever balanced. Actually, because Congress has overspent for decades, the plan uses the past year’s taxable income times the new flat tax rate, also set each year. Result? As long as the economy grows (as it does almost every year), a modest surplus will develop to pay off the debt over a period of many years. When the economy grows rapidly, the amount taken out to repay the debt is larger; in a recession, that amount is smaller, as is the budget for government spending.

    Now beyond “transparency” the idea that you ought to know what taxes you’re paying, and “progressivity”, the idea that taxes ought to be paid (more) by those more able to pay them, what other modification to the idea of everyone paying the same, the “fair share” of taxes should be part of the plan? It’s reasonable that government policy should be designed to maximize growth, again for two reasons. First, “growth”, an increase in the wealth from which we all share, is in the interest of all. Second, growth means an increasing tax base. That in turn means more money to pay for legitimate government expenditures, like roads, law enforcement and other services, without an increase in the tax rate. If this growth in the tax base exceeds the growth in the cost of government services, we’re getting more for the same portion of your income. We all want that.

    What contributes to that growth? “Crony capitalism” and corruption in Washington has resulted in a lot of special deals that contribute to the growth represented by and for special interests. A plan good for no special interest is good for us all. This plan suggests three things are of universal value in assisting growth. Those three are education, health care and investment. So this plan exempts those three expenses from taxable income. It does so broadly, so that government is not telling you what educational choices you make, what health care (and health care insurance) you buy, and what investments you make, (and charity is an investment). You can make those choices better than can Washington.

    Many states and cities have been getting into financial trouble. It is not the Federal government’s duty to bail them out, or even correct the practices that got them in trouble. But if this plan makes sense, if it could correct the revenue problems that the other levels of government have encountered, then the federal government can help them out by making the plan available, optionally, to them. But the feds should not impose anything on those other levels of government.

    Finally, after all the exemptions are taken, some will have more exemptions than deductions. Should they be helped, and to what extent? Consider calculating aid by multiplying their shortfall by the flat tax rate. As with taxes, their assistance will be reviewed by and adjusted as part of the budget process each year. That way, everybody pays the same rate from top, the “billionaires” to bottom, the least among us. For those whose income exceeds exemptions, they pay taxes equal to the rate times the excess. For the least among us, their income supplement, replacing Welfare, Medicaid, Medicare, Social Security and other “entitlements”, is reduced at the same rate. Is this fair to all?

    Finally, if you have read plans that embrace sales or value-added taxes in lieu of or in addition to income taxes, consider this: an unlimited exemption for savings makes this plan exactly like a sales tax; if what you save is exempt, then you’re only paying taxes on what you spend. And as noted above, with this plan you see clearly the cost of government, as opposed to sales taxes, death by a thousand cuts.

  21. And here is the plan, in one page:

    Part Two

    THE TAX AND TRANSFER PAYMENT PLAN

    1. All persons residing in the U.S. shall come together in households for the purpose of reporting all income from any source, each item to be identified by payer’s and payee’s tax number, and for receipt of federal and state benefits. Members of a household need not be related, need not reside together, and a household may consist of as few as one person. The federal government shall collect no taxes other than provided in this act. The federal government shall make no payment to any person, group or other entity except in return for goods or services rendered to it, or as provided for in this act.

    2. Each year congress shall set by legislation a “minimum wage” and a “tax rate”, which in turn will be applied to the previous year’s reported incomes to determine the maximum expenditures of the federal government.

    3. The following income shall not be subject to taxation:
    ? An amount equal to a year’s earnings (2000 hours) at the minimum wage rate, for each adult (age 20-65) member of the household, decreasing 10% per year to 50% at age 15, and increasing 10% per year to 150% at age 70.
    ? All payments for what is classified as necessary health care for all members of the household including medical care, any pharmaceuticals prescribed by a recognized health care professional, vision and hearing aids, and membership fees for health-enhancing entities such as gyms or other exercise facilities. Health care insurance premiums may be deducted but not health care expense paid for by such insurance.
    ? All educational expenses including day care for young children or legally incompetent persons, that portion of state and local taxes identified as spent on education, that portion of parochial school tuition, fees and other expenses identified as going for non-sectarian education, and tuition, fees and educational materials for private school education at any level.
    ? All income saved into an identified account from which investments, may be made. All withdrawals from this account for the benefit of any member of the household shall be reported as income to that member. Withdrawals, such as for charities, special interest groups, or political campaigns, that do not accrue to members’ benefit, will be deductable.

    4, The “tax rate” shall be applied to any income over and above the deductions listed above, regardless of amount.

    5. There shall be no federal tax on corporations or other business entities.

    6. At the request, by legislation duly enacted by a municipality having greater than 100,000 inhabitants or by a state, a surtax may be imposed on citizens of that municipality or state which shall be applied in the same manner as this tax.

    7. For households whose deductions exceed total income, the Federal Government shall make payment equal to the tax rate multiplied by the shortfall in income, as shall municipalities and states.

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    Mirabell studies Economics in Slovakia. It’s a very practical subject for this 22 year old with a mature outlook. Her dream is that one day she will have her own fashion business. She is preparing for that by gathering ideas while she travels. India is her special favourite. It’s an inspiration to her.

    Take this economist’s word for it. The upturn has begun.

  23. Please please please make it even more complicated! We will NOT fix the tax code until it’s completely and absolutely broken and people will no longer even be able to comply with it if they want to. It shouldn’t take but a few more ‘repairs, patches and tweaks’ before even computers fry from trying to figure it out.

    1. The problem with this theory is that computer complexity and capacity mirrors the tax code (ha it may be leaps and bounds ahead of it)

    2. The problem with this theory is that computer complexity and capacity mirrors the tax code (ha it may be leaps and bounds ahead of it)

  24. Major johnson cites the principle that some things need to get worse before they can get better. Might be. My plan, posted earlier, is not something I expect will get enacted because our “leaders” suddenly get religion, but I hope it will be compared by you readers to see just how bad the present system is. But I still hope to hear comments for its improvement.

  25. ith a system so byzantine that even Mitt Romney, a wealthy, financially sophisticated guy with plenty of e

  26. plexity is unnecessary, and it helps explains why taxpayers dread this time of year, when they start pulling together the evide

  27. s also a major reason for the unfairness Obama decries. Yet t

  28. income or adjusted gross income? Was he talking about

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