I haven’t seen the GOP tax plan. Without even looking I’m sure it is not that much different than what we have now, and will probably not change much. Why? Because they never go far enough.
What would I suggest, you say? I actually have two ideas, either one of which I would be happy with.
Steve Forbes introduced the idea of a “flat tax” to me back in 1996. If everybody paid 10% of their income to the government, that would be a fair and equitable system. If you make 40,000, you pay 4,000 in taxes and everything else is yours. If you make 10 million dollars, you pay 1 million dollars in taxes and everything else is yours. No sales tax, no social security tax, etc. Just one percentage amount that comes from everybody and goes into a big pool and we use that to pay our bills (just like a home budget). Why is this a good system? Because it doesn’t discourage working hard (like our current system does). Have you ever heard the expression, “The more you make the more they take”? This system would eliminate that. With our current system, working overtime means you are actually making less money because you will be taxed at a higher rate. you are, in effect, punished for working hard.
Idea #2 is this: Eliminate the income tax entirely. Get rid of it. Replace it with a national sales tax. Make it 10%. Make it 15%. I don’t care. This plan would work because then everybody gets to keep every dollar they earn. Exempt necessities like food, $1000 worth of clothing per year (or whatever), rent and utilities. That way if you worked an overtime shift, you get to keep the entire amount. And an added benefit of this system? The people who are deep in debt could pay their way out. Have too much in student loans? Work an extra shift every week and send the extra to your loans, knowing that money didn’t get taxed.
Because it’s obvious our current system doesn’t work. The rich people are upset because they pay so much, and the poor people are upset because somehow they think the rich people should pay “their fair share” (a term that I still have never gotten quantified by any liberal I’ve asked).
Let’s look at a scenario:
Two married couples. Their spouses stay home with their three kids. One is a nurse and the other is an office worker.
At the end of the year the nurse made $92K working every weekend, overtime, holidays, and night shift. The nurse pays just over $5K in income tax. The office worker makes $36K and doesn’t pay any income tax, but actually receives $3K as a “refund” from the govt.
These are solid numbers. How do I know? Because both were me separated by 6 years. I made that much as an entry level computer programmer, and then went to nursing school and earned that much as a nurse by working every weekend, 48-60 hours a week, almost all holidays, and night shift. I earned it. Now if I had NOT done any of that extra stuff, I would have earned about $40K instead of $92K, and I would have gotten a “refund” instead of paying tax. Why should my hard work be punished by a 8K deficit?
The answer is: it shouldn’t. If my options were: work no extra and get 36K (10% flat tax) or work all that extra and get $83K (10% flat tax which I rounded up), I would have been happy to pay the 10%.
So let’s see what the GOP and Trump have in store for us.