Tax fairness

Obama and the Democrats seem determined to raise taxes even further, while the Republicans refuse to budge on new taxes unless they’re offset by reduced taxes elsewhere. I have a modest suggestion. As things stand, fully half of Americans pay no income taxes whatsoever. In fact, many pay a negative tax, because tax credits offset any taxes due, resulting in a “refund” of taxes they never paid.

So, how about we remove the personal exemptions and standard deduction, and begin taxing that untaxed 50%. At the same time, we can reduce the tax rate to reduce the taxes due from middle-class taxpayers by an amount sufficient to offset the loss of the personal exemptions and standard deduction. That would make the Democrats happy, because we’d be increasing taxes, but it would also make the Republicans happy because those tax increases would be completely offset by tax reductions elsewhere.

We can then get to reducing the deficit. I suggest a 100% reduction in deficit spending the first year and every year that follows. Economic growth should then allow us to begin cutting down the existing debt.

 

2 thoughts on “Tax fairness”

  1. They also need to fix the tax code which allows companies like General Electric to get refunds when they make billions of dollars in profits.

  2. Disclaimer: I’m not in the USA, and am not a US citizen.

    Personally I’ve wondered for a while if ever letting politicians run deficit budgets is a good idea. Lately I’ve wondered if they shouldn’t be restricted to spending tax receipts from the previous year: that is, 2011 taxes would be spent in 2012. Less taxes, less spending. Wise governments (an oxymoron?) would keep some money aside for rainy years.

    Of course, the EU is proving that financial restraints on governments are difficult to implement or enforce. 🙁 Further, I strongly doubt that economic growth will do anything significant for the USA’s deficit — I imagine the USA will inflate its currency instead; I can’t see what else it will do.

Comments are closed.