In the interest of fairness and efficiency I would propose the follow tax structure.
1. Eliminate all Corporate taxes. These are simply hidden taxes and are paid by the consumer of the Corporation's products anyway. Make US Companies more competitive and make foreign companies want to invest in the US by eliminating all Corporate Income taxes. This also keeps congress from meddling and playing favorites.
2. Eliminate all personal income taxes and abolish the IRS. ( read the whole post before you go off the deep end)
3. Institute a National Consumption Tax on all transactions. If we want a revenue neutral proposition the initial rate would need to be approximately 25% based on approximately $15 trillion GDP and $4 trillion in Government spending. (more on that in another post)
4. For those who feel this is regressive (there are troglodytes among us) exempt basic food, article of clothing under $100, and housing (either rent or mortgage) up to $6,000 annual expense.
These changes would encourage investment and saving, discourage consumption, eliminate distortions, and unleash a flood of new economic activity. It would save hundreds of billions in private legal and accounting fees as well as the entire budget of the IRS. The downsides....congress would not be able to partake in social engineering experiments.
Monday, January 31, 2011
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