Tax reform is desperately needed. Congress has allowed the IRS to fill the tax code with over 75,000 pages of loopholes for the “players who pay.” Politicians have proposed the fair tax and the flat tax reform. These are good ideas, but the only problem is the politicians. We the People cannot trust the politicians to reform the tax laws so that they are “fair” or “flat.”
Let me propose a THE ONE PERCENT TAX REFORM. It is based on two principles: The first principle is that Congress must balance the budget and pay off the national debt. A constitutional amendment must be added to the Constitution that states that Congress must live within the budget. If they don’t balance the budget and pay off the national debt, then they must forfeit 20% of their pay, the expense accounts, and benefits for each year they don’t.
My FED-UP article explains this. We the People must demand politicians pass this amendment. Without a balanced budget amendment politicians will continue to promise reforms only to raise taxes.
The “Penney Plan” proposes to balance the budget within a decade. If Congress would make that a “Two-Cent Plan” and use one cent to balance the budget and one cent to pay down the debt, then the debt could be paid off within 20 years. The only hindrance to the Penny Plan is politicians!!!
The second principle is that every person and every company should pay a fair and reasonable tax.
To meet this demand, all loopholes must be closed. There should be no tax exemptions. NONE!
I can hear the howls! Alright, make an exemption for religious organizations and charities. But, before long politicians will be declaring everything a religion or charity, especially those charities giving them campaign donations.
To make tax fair and reasonable without going into the land of uncertainty, then keep the income tax but make it very simple, fair, reasonable, and applicable to all.
To be reasonable the rate must be affordable to all. Here is an affordable standard:
Gross income plus assets must be used to determine the tax rate, but only the gross income is taxed. For example:
If assets and income are below 1 million dollars, then the tax rate is 1% on the gross income alone.
If assets and income are between $1 million and $10 million, then the tax rate is 2% on the gross income.
If assets and income are between $10 million and $100 million, then the tax rate is 3% on the gross income.
If assets and income are between $100 million and $1 billion, then the tax rate is 4% on the gross income.
If assets and income are between $1 billion and $10 billion, then the tax rate is 5% on the gross income.
If assets and income are between $10 billion and $100 billion, then the tax rate is 6% on the gross income.
If the assets and income are between $100 billion and $1 trillion, then the tax rate is 7% on the gross income.
Those rates are simple, fair, affordable, and reasonable for every individual and for every business.
Yes, the same rates will apply to businesses—and here is the catch—only those businesses that have their manufacturing plants within the United States.
The tax rate of these businesses would be based on their gross income and assets. The rates could be the same as above or doubled—but absolutely no more than that. For example, a business with income and assets less than one million dollars would pay a 2% rate, etc. For example, these businesses would pay a maximum of $20,000 in taxes. It would be interesting to know how much these businesses pay in taxes now. It would also be interesting to know how many Fortune 500 businesses pay ABSOLUTELY NO INCOME TAXES!!! These large businesses simply squash the competition. My tax reform plan would create a “fair” playing field for all business where competition is encouraged, not discouraged.
Now, that would bring manufacturing back to the United States so fast that the “great sucking sound” you hear would be jobs and prosperity returning to the United States.
All companies who have manufacturing plants outside the United States would pay the above tax rate based on their income and asset level plus an additional rate of 10% on their gross income earned in the United States.
Individuals who live outside the United States and earn income within the United States would also pay an additional 10% tax on their gross earnings.
A tax on gross earning is simple to figure and easy to pay. For example, if someone has assets and income of $100,000, then the tax would be $1,000. Now, compare that to what you are paying now. Take your pay stub and examine the amount of money taken out for federal taxes and it should make you angry because you are paying the billionaire or even trillionaire rate! Even after you have prepared your tax return with all the deductions, the percentage paid in federal taxes often exceeds the billionaire or trillionaire rate. Even the amount of money you pay the tax preparer is almost at the 1% level.
This also brings up the issue of equality where over 40% of citizens PAY NO INCOME TAX while 20% of citizens PAY OVER 75% OF THE INCOME TAXES. That is not fair!!! Every citizen should pay a “fair” share, and this 1% tax plan would do that. No exceptions!!! Especially, all welfare bums should pay a tax on all their GROSS welfare income. We have welfare millionaires!!! It is time they pay their fair share.
Now, this leaves the problem of Social Security and its tax, which is about 15%. By the way, that is 7 ½% on the gross income that your employer pays and 7 ½% that you pay on the gross. That means you are paying the trillionaire rate. That is unreasonable, unaffordable, and unfair!!!
First of all, this unfair Ponzi scheme should be repealed completely.
However, the promises made to the senior citizens must be kept, PERIOD!!! Even if we have to borrow the money!!! And, I think that the politicians who voted to raid the Social Security account should have all their assets and income taxed at a 95% rate. States or businesses or foreign governments who took the money should be required to pay it back into the Social Security Trust Fund with 20% interest.
Young people who have paid into the corrupt system knowing they will never see a dollar in benefits must be allowed to put their social security taxes into a personal Roth IRA. They must also be given a reasonable settlement. These individuals should be allowed to sue the politicians—who voted to use the Social Security trust fund—for the amount they have paid into the system plus 20%
Young people who have not paid into the system yet should be allowed to put their social security taxes into a Roth IRA. After all, saving 7 ½% of your income with a matching 7 ½% from your boss is not a bad deal—it’s a great deal!!! Now, you will have a generation retiring as millionaires.
This also demands some thoughtful reforms of the Medicare program. Even if you kept the Medicare tax, it is already a small percentage of your income—about 1.5%.
These three reforms (balancing the budget, paying off the nation debt, and creating a fair tax code) would turn America from being a debtor nation into a creditor nation. Balancing the budget and paying off the debt within 20 years would bring unprecedented prosperity to this nation, lifting millions of families out of poverty. Having solid retirement accounts that can fully be inherited by the family—tax free—would also lift millions out of debt—especially in their senior years.
By the way, I believe part of this plan should eliminate all taxes on the elderly. That’s right!!! Senior citizens—in the 1% tax bracket—who have paid taxes all their lives should be able to live the remaining years of their life tax free—absolutely no taxes after 65. No income taxes, no property taxes, no sales taxes!!! That alone would help the elderly more than the puny increases in benefits.
THE ONE PERCENT TAX REFORM alone would turn America from a nation of welfare bums—crying “Give me. Give me”—into a nation of self-reliant individuals—singing “God bless America, land of the free and brave.”
You may not like this idea, but the real point is that politicians cannot be trusted to pass tax reform that would truly be simple or fair. I believe the fair tax or flat tax plans are great ideas, but politician will mess them up. They have proven that money “buys” tax loopholes. Therefore, We the People must insist that any tax reform be simple to understand, fair, and affordable to every person.
THE ONE PERCENT TAX RETURN is so simple that anyone can understand it and that would make it much harder for politicians to mess up with “smokescreens and loopholes.”
Finally, the Constitutional amendment must also state that taxes cannot be raised without the approval of all the people. Yes, a referendum on all tax hikes must be approved by the people at a national election every two years.
Again, the politicians have proven that they love to raise taxes and call them something else “fees” or “revenue enhancement.” Politicians must be stopped and WE THE PEOPLE must do just that. God help our children, grandchildren, and great-grandchildren if we do nothing!!!