Ideas for tax reform

[Mr.Phips]

I am wondering what many folks' ideas are for tax reform are here.

I(and most Democrats should be) am adamantly opposed to anything that would get rid of or reduce any deductions for middle class families(which I am defining as those making under $250,000 a year).  I would target any tax relief towards these people, possibly by expanding exemptions and getting rid of the 10% income threshold for deductability for medical expenses. 

I would also keep most current rates exactly as is.  With these expanded deductions, 99% of Americans would see their taxes go down. 

What I would do is add a 50% top marginal bracket for those making over $2,000,000 a year.  There are about 200,000 of these people and this new bracket(along with the increase to 39.6%) will bring in about $150 billion in new revenue annually. 

On the corporate side, many changes can be made and here is where I would support lower rates.  One thing I would do is to create a flip switch to a CEO's personal return(their 1040), which flips on a 100% marginal top rate on any income(dividends, wages, ect) on any income above $500,000 a year when the company's federal taxable income on the 1120 falls below that amount. 

[True Federalist (진정한 연방 주의자)]

So all CEO's are owners of their companies?  I realize it may seem quaint, but there are, or at least were, companies whose CEOs are only the most senior employee hired by the owners and who have at most minimal investment interest in the company.

[Jordan]

Abolish the federal (and state + local) income tax

[DC Al Fine]

1) Cut corporate income taxes to 0%

2) Create a 0% income tax rate for all dividend, interest capital gains income below a certain threshold (say $75 000 for the sake of argument)

3) Raise taxes on dividends, interest, and capital gains income above the threshold to actually tax the rich.

4) Eliminate income tax deductions while lowering rates to make it revenue neutral.

5) Put in a small VAT of about 5% with exemptions for things like milk, bread etc.

[Donerail]

Repeal subtitles A, B, and C.

[Sopranos Republican]

Get rid of income tax, that would help a lot of different things.

[Darth Maul]

Abolish the IRS.

[Mr.Phips]

Abolish the IRS.

Then I'd very likely be out of a job. 

[jaichind]

Something similar to what Hong Kong used to have (they have since moved to system more like USA but still vastly simpler and better):  Standard deduction and flax tax on top of that.  Capital gains, dividends should not be taxed.  If there is political desire to reduce inequities then there should be a wealth tax for all wealth above some threshold.  The goal should be to encourage output and economic activity. 

[memphis]

People making $250,000, after all deductions and exemptions are not middle class. They are fantastically wealthy, making several times the median salary in this nation. We should remove the SS cap, without additional benefit for richers. Bring the capital gains tax up to the same rate as for earned income. New higher brackets for extremely high earners.

[TNF]

1) Pass the Fairness in Taxation Act, creating new tax brackets for millionaires and billionaires and setting a top income tax rate of 49% on persons making over $1 billion per year.

2) Tax capital gains at the same rates as regular income.

3) Close tax loopholes for companies that send jobs overseas.

4) Implement a social tariff scheme that taxes companies that outsource jobs, with higher rates for companies that use sweatshop labor and take advantage of poor environmental standards and lower rates for companies that at least provide livable wages and benefits in these other countries.

5) Implement a value added tax with exemptions for food, medication, clothing, housing, and education.

6) Implement a financial transactions tax.

7) Implement a tax on the size of banks to reduce the concentration of economic power in the hands of the financial sector.

End tax preferences for 401(k)s and IRAs and instead encourage Americans to utilize Social Security as their retirement program because it is both more efficient and more cost effective.

9) Abolish the cap on the Social Security payroll tax.

10) Stop taxing Social Security benefits. (AKA go back to the way things were pre-Reagan)

11) Abolish the corporate income tax on value added manufacturing in the United States.

12) Restore the Estate Tax to Clinton-era levels and implement it retroactively to make up lost revenue from the Bush years.

13) Use taxation as a means of phasing out inefficiency. Tax inefficient products and use the tax code to support efficient and productive enterprises.


That's all I have for now.

[Frodo]

1) Pass the Fairness in Taxation Act, creating new tax brackets for millionaires and billionaires and setting a top income tax rate of 49% on persons making over $1 billion per year.

2) Tax capital gains at the same rates as regular income.

3) Close tax loopholes for companies that send jobs overseas.

4) Implement a social tariff scheme that taxes companies that outsource jobs, with higher rates for companies that use sweatshop labor and take advantage of poor environmental standards and lower rates for companies that at least provide livable wages and benefits in these other countries.

5) Implement a value added tax with exemptions for food, medication, clothing, housing, and education.

6) Implement a financial transactions tax.

7) Implement a tax on the size of banks to reduce the concentration of economic power in the hands of the financial sector.

End tax preferences for 401(k)s and IRAs and instead encourage Americans to utilize Social Security as their retirement program because it is both more efficient and more cost effective.

9) Abolish the cap on the Social Security payroll tax.

10) Stop taxing Social Security benefits. (AKA go back to the way things were pre-Reagan)

11) Abolish the corporate income tax on value added manufacturing in the United States.

12) Restore the Estate Tax to Clinton-era levels and implement it retroactively to make up lost revenue from the Bush years.

13) Use taxation as a means of phasing out inefficiency. Tax inefficient products and use the tax code to support efficient and productive enterprises.


That's all I have for now.

I like all your proposals, although with regard to the first, how do we ensure that the wealthiest pay their full share -and not hide their money out in Switzerland or the Cayman Islands? 

[memphis]

What do you mean by "encouraging Americans to utilize Social Security?" Participation is already mandatory. What more encouragement could one get? However, it is not sufficient to live in retirement by itself. People need to save additional funds for retirement too.

[Link]

I am wondering what many folks' ideas are for tax reform are here.

I(and most Democrats should be) am adamantly opposed to anything that would get rid of or reduce any deductions for middle class families(which I am defining as those making under $250,000 a year).

No one making a quarter of a million dollars a year is middle class.  And I have no interest in shielding people like that from higher taxes.  Are you crazy?  Put the crack pipe down.

I would also keep most current rates exactly as is.  With these expanded deductions, 99% of Americans would see their taxes go down.

Unfortunately most people need to see their taxes go up in order for us to solve our problems.

What I would do is add a 50% top marginal bracket for those making over $2,000,000 a year.  There are about 200,000 of these people and this new bracket(along with the increase to 39.6%) will bring in about $150 billion in new revenue annually.

You cannot balance the budget let alone pay down debt solely on the backs of the poor by cutting benefits.  Likewise you aren't going to solve America's problems solely by victimizing the ultra rich.

On the corporate side, many changes can be made and here is where I would support lower rates.  One thing I would do is to create a flip switch to a CEO's personal return(their 1040), which flips on a 100% marginal top rate on any income(dividends, wages, ect) on any income above $500,000 a year when the company's federal taxable income on the 1120 falls below that amount. 

As someone else pointed out plenty of CEOs aren't owners and a lot of owners don't draw exorbitant salaries.  The one's that do well often make their exorbitant money on the back end when they sell the business.  And that profit would be in the form of capital gains and be exempt from your income tax scheme.

You like most Americans need to get some real data and think this through.  Wringing money out of people making $2 million a year while giving people making $250K a year a free pass makes no sense.