My fair Tax Plan

I did my taxes.  And as has been true after every single time I have been told that the taxes are lower, my personal rate went up.  Apparently, the rate is down and the deductibles are up if you are making a lot of money, like the kind of money where you can donate large amounts to the candidate of your choice.

In my tax plan, it is going to a flat rate--not flat like "everyone owes $10,000 dollars, which is less than I pay but more than a lot of people can pay, but a flat rate that is a percent and that does not have a million (i chose that number for its subliminal effect) deductions available for giving away massive amounts of money and making huge bad investments on purpose.

Its pretty simple, really.  And gives 10% to federal and 10% to states.  Because even God only asked for 10%.  It starts with a simple number, that is figured yearly.  A family of 1 person or 2 adults (per person because 2 can't really live as cheap as one unless only one of them get to buy anything) doesn't pay anything if they make less than the highest state's (Alaska) Federal Poverty level.  Children cost poor people about 8,000 per year each, so each child is a 8,000 deduction, and that number is also refigured  each year to match the changes that the value of the dollar and the economy create.

I could have chosen the middle class estimate which was about 16,000 per year or the rich person estimate which was about 32,000, but which ever is chosen, it is used no matter your income not stepped up for middle and high--everyone wants to do more for their kids.  So a person making the US median income, that is 50% above and 50% below, if single and no children would pay 43,585-19920 = 23665 x0.10%=$2366 to federal and the same to their state.
A person that made $20,000 would only pay 8$. to federal and 8 to state.
If that same median income person was a couple with 3 children under 18, that would be $43585-$19920-$19920=$3545-(3 x $8083) = -$21704.  And there you have your earned income credit.  It would mean that no one didn't have what was needed to at least care for their family at the basic level..

But what would that do to a person at the bottom edge of the top 2% of income earners?  I'll use $225,000 since it is hard to find anything more recent than 2013.
A married CEO with a stay-at-home wife has an income of $225,000 -$19920-$19920 = $205,080 x 0.10%= $20,508 to federal and $20,508 to state.  That same person with a stay at home wife and 2 children would owe $16,916 to both.

All income, whether from investments or from wages or company profits or bonuses would go toward the same number--"income".

What would that do to the tax base?  Why make the state and federal the same?  Because the state is responsible for just as much as the federal.  Would we collect as much that way?  I don't know, but those people that are in the top 1% would be paying the same share and those at the bottom would not be battling poverty and children whose future is aimed toward prison and homelessness and hopelessness.

In 2011, Warren Buffet (I actually like this man, but his income was easy to find) made $62,855,038.  If he paid taxes with my plan, he would owe $62,855,038 - $19,920 = $62835118 x0.10%= $6,283,511 to federal and the same to his state.   He actually paid a little more than this in federal taxes, but I have no idea what his income would have been if it hadn't been adjusted to make capital gains, etc not as much.  I also don't think he paid nearly this much for state income tax. I suppose if a person that has income in multiple states, it would be divided out in the same manner it was earned--50% from Kentucky then 50% back to Kentucky, 10% from California, then 10% back to California.

About 42% of the federal revenue is from individual Income tax.  The 2013 Federal revenue was about 2.8 Trillion dollars so $1,176,000,000 came from personal income tax.  There are about 115,227,000 households in the US now.  About 27 percent of those household have only one person in them.  About 46% of households have at least one child.  That means over 25% of households have at least 2 adults and no children.  The US population has reached 318,892,103 with 74,181,467 under the age of 18.    The percent of households living in poverty ranges from 7.6% to 21.6% depending on the state.

But look at what else is changed by a fairer tax law.

If I can figure this on a blog, I'm pretty sure the IRS can downsize.  Also, how many variations of TURBOTAX--a tragically glitchy and expensive program that is good for 1 year and that charges extra for just about everything.  How about the cost of all those tax forms that still exist and the cost of tax accountants that have no other job than trying to find more ways to not pay taxes.  I searched for information about the cost of the IRS and the profits from tax companies, but found nothing.

I do know that a ton of companies rise up in January, start hiring people to stand around in weird costumes to wave people into the "get your taxes done" places.  There is a crapload of bad debt every year that comes from sales in which the first high rate payment is an expected tax return.  People that owe 250$ on taxes pay 250$ to get their taxes done.  People that expect to get $900 back go to the car lot of the renta center and have them done and end up with something that is at least $900 dollars over-priced.  For 2 minutes after the beginning of tax season, people that got something back are buying things they usually couldn't afford.  The week of April 15th, people that still owe a bit are trying to figure out where to get the money to pay that in.  The current system is soooo flawed.

Is it possible that 10% wouldn't provide as much revenue?  Maybe.  Do we need to spend more on defense than all the other countries combined?  We should be the safest, most peaceful country in the world for all the money we spend on defense, yet we fall between Argentina and Jordan, with 91 countries that have more violent deaths than we do and 100 countries with less violent death.

Corporate taxes are less than 10% of the federal revenue.  The next biggest source of revenue for the federal government are those two items we pay out from our paychecks--social security and medicare--a whopping 34% of revenue.  It is no wonder all those lawmakers keep wanting to grab that money for their own use.  But it is designated.  It is we, the people's annuity retirement plan.  We pay it in, we get it back--at least if we live long enough.  Those lawmakers have dipped into it before, in fact, that revenue got popped into the general revenue where it was used for the annual budget.  It reminds me of the gambler parents that use their childrens savings to go to the casino.

We are a big country, third largest by population, but less than half the size of the bigger two--China (#1) and India (#2).  We are more than twice the population of Russia, but Indonesia, Brazil, Pakistan and Nigeria and Bangladesh have populations larger than Russia.  We have 3 times the population of Mexico and 5 times the Population of the UK--of course the UK used to be much bigger, it is now just North Ireland, England, Wales and Scotland.  At one time, the British Empire included much more, including parts of Canada, Africa, the Caribbean, India, Australia and our own first 13 colonies.  When I was a kid, China (called "red china", but not because they were republican, it was our own bit of ignorance and fearmongering.  One of these days I'll look at what made a country with as old and proud of history as China revolt against their power structure, (That would take a while, because we never really touched that in school)  was known to be huge and threatening.  It and Russia were considered to be the two countries that could threaten the USA defense.  The cold war was very much alive.  India, almost as large, was almost unspoken of.  They were independent of England by 1947, but I think most of us saw them as small, poor, and powerless due to their previously being just a part of the British Empire.  Pretty silly on our part.

Glad that China and India aren't spending as much per person on defense as we are in the USA.

So what should taxes be used for?
For the good of the people both present and future.  What does that look like?

1. The continued care of the land that sustains us.
2. Infrastructure to keep everything moving.
3. The health of the people.
4. The education of the people.
5. The safety and defense of the people.
6. The improvement of the standard of living of everyone.

That is my plan.
Share it with those congressmen that still think that just because big business gives them money for greasing their wheels, the rest of us feel like that about them and their tax breaks.  Every Corporation--10% to federal and 10% proportioned out between the states they are in according to how much money that state brings them.  They use the roads, they use the education and healthcare for their employees.  If they are people too, they can pull their weight.  (a small business that isn't making poverty level after expenses gets the same deal as a person not making enough, but a business that needs an earned income credit needs to just go get a job like the rest of us.