Today I want to offer up my suggestions for reworking the IRS and other taxes.
First, I'ld like to address Social Security. This might be "untouchable" to some politicians but the reality is it HAS to be changed in order to continue to provide the benefits we have come to expect from it. Here are the changes I propose: 1)Stop the cap! Why should people who make above a certain amount quit paying the SS tax on higher income? The system was designed to use a percentage of everyone persons income to provide a safety net for disability and old age. When we allow some individuals (and their employers matching contributions!) to stop at a given point, we're in effect cutting off a source of revenue from the people who can most afford to pay it! 2)Quit allowing government employees to avoid paying SS. The theory was they have a pension plan so will not need Social Security, but the reality is that many, if not most, work in the private sector also allowing them to collect, despite not paying into the system for 20 to 30 years!! 3) Instead of just raising the age of eligibility, why not institute an age based tier system? I recommend lowering the initial age people can collect to 60, but raising the percentage they can collect for every 2 years they postpone receiving it. (The following are just examples because I haven't done the research on exact numbers or percentages) People my age don't get the maximum payout unless wait until 70 to retire. Under my system, for every year you collect early, you lose 6%. If you do feel compelled to collect at 60, you get SS but only 40% of the amount you'ld have received for waiting until 70. If you collect at 65, you get 70%, etc...
But here's the REAL kicker: I also propose you get an EXTRA 3 percent for every year you postpone retirement AFTER 70. This addresses the fact that people are living longer and are able to continue working later, while also giving folks an incentive to wait longer to collect.
Now to tackle the nightmare that is the IRS! Our tax code has become so complicated that virtually no one understands ALL the provisions and loopholes in it. I propose simplifying the personal income portion of the tax code first. To start, we need both a flat tax base line AND deduction limits.
To begin I would use 20% as the percentage we pay for federal income tax, with a 1% increase for each additional 10,000 dollars of income AFTER deductions, up to a maximum of 60%. (This would mean you would have to be making WELL OVER 400,000 a year before you were paying the maximum tax rate!)
Next we address deductions. The standard deduction should be current minimum wage times 40 hours times 52 weeks a year.
(Currently $7.25 X 40 X 52 for a total of 15, 080.) Add to that 2000 for non-working spouse/sig. other, and also 2000 per child up to a maximum of 2 children. (If your religion, personal preference or lack of birth control gives you more than 2 children, the rest of the taxpayers shouldn't be expected to subsidize them!) The only other deduction I would consider is the deduction for mortgage interest because home ownership DOES help make for more stable communities, but I would also limit that severely.
If we do choose to allow for a mortgage interest deduction I would limit it in this manner: Only allow the interest deduction for the first 10 years AND limit it to the first X amount of a principal mortgage. (In this case X would be 5 times the poverty line for a family of four. Say that is currently 22000 a year, then only 110,000.00 of a home mortgage interest would be allowed. People who purchase a house for less would only be allowed to deduct the actual interest paid and those who can afford more shouldn't be rewarded for already being better off financially.)[Note: taxpayers already allow the wealthy to deduct interest paid on multi-million dollar homes, in effect, subsidizing home mortgages for the rich.] ALL other of the current deductions would cease!!
I need to do more research before I can intelligently offer reforms for the business side of taxes.
First, I'ld like to address Social Security. This might be "untouchable" to some politicians but the reality is it HAS to be changed in order to continue to provide the benefits we have come to expect from it. Here are the changes I propose: 1)Stop the cap! Why should people who make above a certain amount quit paying the SS tax on higher income? The system was designed to use a percentage of everyone persons income to provide a safety net for disability and old age. When we allow some individuals (and their employers matching contributions!) to stop at a given point, we're in effect cutting off a source of revenue from the people who can most afford to pay it! 2)Quit allowing government employees to avoid paying SS. The theory was they have a pension plan so will not need Social Security, but the reality is that many, if not most, work in the private sector also allowing them to collect, despite not paying into the system for 20 to 30 years!! 3) Instead of just raising the age of eligibility, why not institute an age based tier system? I recommend lowering the initial age people can collect to 60, but raising the percentage they can collect for every 2 years they postpone receiving it. (The following are just examples because I haven't done the research on exact numbers or percentages) People my age don't get the maximum payout unless wait until 70 to retire. Under my system, for every year you collect early, you lose 6%. If you do feel compelled to collect at 60, you get SS but only 40% of the amount you'ld have received for waiting until 70. If you collect at 65, you get 70%, etc...
But here's the REAL kicker: I also propose you get an EXTRA 3 percent for every year you postpone retirement AFTER 70. This addresses the fact that people are living longer and are able to continue working later, while also giving folks an incentive to wait longer to collect.
Now to tackle the nightmare that is the IRS! Our tax code has become so complicated that virtually no one understands ALL the provisions and loopholes in it. I propose simplifying the personal income portion of the tax code first. To start, we need both a flat tax base line AND deduction limits.
To begin I would use 20% as the percentage we pay for federal income tax, with a 1% increase for each additional 10,000 dollars of income AFTER deductions, up to a maximum of 60%. (This would mean you would have to be making WELL OVER 400,000 a year before you were paying the maximum tax rate!)
Next we address deductions. The standard deduction should be current minimum wage times 40 hours times 52 weeks a year.
(Currently $7.25 X 40 X 52 for a total of 15, 080.) Add to that 2000 for non-working spouse/sig. other, and also 2000 per child up to a maximum of 2 children. (If your religion, personal preference or lack of birth control gives you more than 2 children, the rest of the taxpayers shouldn't be expected to subsidize them!) The only other deduction I would consider is the deduction for mortgage interest because home ownership DOES help make for more stable communities, but I would also limit that severely.
If we do choose to allow for a mortgage interest deduction I would limit it in this manner: Only allow the interest deduction for the first 10 years AND limit it to the first X amount of a principal mortgage. (In this case X would be 5 times the poverty line for a family of four. Say that is currently 22000 a year, then only 110,000.00 of a home mortgage interest would be allowed. People who purchase a house for less would only be allowed to deduct the actual interest paid and those who can afford more shouldn't be rewarded for already being better off financially.)[Note: taxpayers already allow the wealthy to deduct interest paid on multi-million dollar homes, in effect, subsidizing home mortgages for the rich.] ALL other of the current deductions would cease!!
I need to do more research before I can intelligently offer reforms for the business side of taxes.
RSS Feed