Tax Reform

Tax Reform–

Is this simple enough?

Everybody to pay the same personal tax rate on income whether reported on a W-2 or a 1099 etc.

  • Everybody should pay the same rate on their first $10,000,
  • a higher rate on incomes between $10,001 and $20,000,
  • a higher rate yet on incomes between $20,001 and $30,000,
  • a higher rate on income between $30,001 and $40,000 etc. but
  • no rates will be higher than 50%.

Such a plan allows a person making a million dollars a year to be taxed on their first $10,000 at the same rate that a person making $10,000 a year.  Same thing on their income between $10,001 and $20,000.

Minimize itemized deductions and make all income subject to social security tax with no cutoffs.

The Social Security Administration has announced that the maximum earnings subject to the 6.2% FICA tax rises to $118,500 for 2015. Why is there a limit when there is a problem funding social security? We all pay school taxes with or without having our own children in school.  The same principal should be applied to Social Security.

Individuals with incomes from any source including dividends, pensions, 401Ks, earnings reported on 1099, and W2s etc. greater than $150,000 annually and$200,000 for partners filing joint returns  would not qualify for social security retirement income benefits other than Medicare regardless of how much they paid into it.

Corporations should pay a flat tax on net earnings and all loopholes should be eliminated.  The rates currently being paid might be high but with the loopholes, the actual tax paid is small.  The flat tax could be graduated in the same way the personal income tax is.

Corporate shares and ownership may be passed on to direct family members (children, grandchildren, parents, siblings) without being taxed but if those shares are ever sold or traded, or ownership is sold, all proceeds in excess of debt would be treated as ordinary income.

Limit the tax code to no more than 10 pages.