Colman: OVERTHROW THE TAX SYSTEM

We are just three months away from the dreaded April 15.  That is the time that Americans pay hundreds of dollars to professionals to minimize their tax liability.  Or they spend dozens of hours—non productive—trying to save themselves money.  American tax codes—Federal and State are confusing and there is no way you will not violate a code or a law.  Government makes us all criminals—except for the criminals that do not participate at all.

Taxation in America is so complicated that many individuals need to hire an accountant.  With a flat-rate tax, no accountant would be necessary. 

Warning:  Do not expect significant changes from government.  Whether government wants to build a wall along the Mexican-American border, cut tax levels on some people as well as some businesses, or increase government spending on education, health care, transportation, or some other cause, the basic status quo is likely to remain — and remain for a long time.”

Get ready for a bad time.  Until the people revolt the politicians will see no reason to fix the problem.

tax relief ahead

OVERTHROW THE TAX SYSTEM

By Richard Colman, California Political News and Views,  1/14/19 


The tax system in the United State is too complicated. 

The time to overthrow the tax system is now. 

The easiest tax system is a flat-rate tax.  Using a figure of 10 percent, the flat-rate tax on $100,000 of income would be $10,000.  The flat-rate tax should contain no exemptions, no deductions, and no special treatment for any taxpayer.   

To make a flat-rate tax system more appealing, government should permanently dismantle the Internal Revenue Service and similar state, regional, and local taxing authorities. 

In addition to a flat-rate tax, all levels of government should put a limit on spending and a limit on taxation. 

What should happen to a needy person, perhaps a person who needs food?  Government should — out of revenue coming from taxation — set aside some funds for the purchase of food for a low-income person. 

Many Americans, especially liberals, can be expected to oppose a flat-rate tax.  These individuals should know that the United States already has two flat-rate tax systems. 

The first flat-rate tax is on wages.  On wage income, the taxpayer must contribute 6.2 percent of that wage income to Social Security.  The boss has to match that 6.2 percent.  Thus, on $100,000 of wages, the federal government will receive $12,400 annually.  For 2019, the wage ceiling for Social Security contributions is $132,900.  For a person earning over $132,900, he and his boss owe nothing in Social Security taxes. 

The second flat-rate tax also applies to wages.  At all wage levels, the basic Medicare tax is 1.45 percent.  Thus, on $100,000 of annual wage income, the taxpayer owes $1,450.  The boss must match this amount, bringing the total annual tax contribution to $2,900.  For a single individual, a wage level exceeding $200,000 annually means a higher Medicare tax for the individual and his boss.  For a married couple filing jointly, wages on more than $250,000 a year also produce a higher Medicare tax. 

Note the term “wages.”  Income from non-wage sources — such as income from interest, dividends, the sale of an asset (capital gains), or rent — are exempt from tax obligations to Social Security and Medicare. 

Taxation in America is so complicated that many individuals need to hire an accountant.  With a flat-rate tax, no accountant would be necessary. 

Warning:  Do not expect significant changes from government.  Whether government wants to build a wall along the Mexican-American border, cut tax levels on some people as well as some businesses, or increase government spending on education, health care, transportation, or some other cause, the basic status quo is likely to remain — and remain for a long time.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.