President Bush's (in pocket) Tax Commission Report

Taxes. Necessary. Like my article on  Contracting Out on my web site, paying taxes is contracting out services to others for items that you want to be accomplished for you when you do not  have the ability or time to do it yourself.

 

The President’s Commission on changing the Taxes paid to the US Government is a poor attempt to alter the tax code – while being revenue neutral – by shifting who pays more for services that they do not use and who have no ability to complain about it after the shift.

 

Mainly, it is the middle class and below who will get the “short shift.”

 

If the Federal Government really wanted to reform tax collection into a more equitable way based on the “ability to pay” rather than all must pay mode it is easy to do than they make it out to be.

 

Social Security systems has a method whereas if you make over a certain dollar threshold it triggers a rule that results in every two dollars you make above it they take away a dollar in benefits.

 

For individuals sole proprietorships they should have make it for every dollar made above $1,000,000 the tax rate is 50%. If it is good enough for Social Security at the low end then it must also be good for the high end.

 

All incorporated companies who have NET profits over $10,000,000 – money which is NOT going to be distributed to shareholders – then pay 65% on all profits above $10 million dollars. They are not giving it back to the investors, just holding it, so they obviously DO NOT NEED IT. Money distributed to shareholders is taxed at the shareholder level – not at the corporate level.

 

They always tout that investors need profits – but if a corporation NEVER distributes money to investors then that argument is blatantly false. If the corporation keeps it then TAX IT.

 

To avoid the skew by the top 10,000 corporations (and Limited Liability ones) take data for all those not in the top 10,000 and divide it into 4 brackets of taxes on profits. Have always a minimum tax on each bracket of 5, 7, 10, 15%. Every corporation MUST pay Federal taxes. Have the max be 5% above the minimum based on net profits. That would determine the “Top out” gross profits level where the max bracket would be.

 

All corporations above that level then have a sliding minimum of 4, 8, 12, 18% of gross income with max again 5% above that. Same exclusion that money distributed to shareholders is NOT taxed. The shareholders pay tax on the income distributed to them – as it should be.

 

Is this hard to do? Not at all. Does it seem fair to have corporations pay like individuals do? (by law they are an “individual.”) Logical? Yes. Will enough people write to congress to get them to do something that is logical, reasonable, simple? No.